TITLE 28. INSURANCE

PART 1. TEXAS DEPARTMENT OF INSURANCE

CHAPTER 3. LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES

SUBCHAPTER T. MINIMUM STANDARDS FOR MEDICARE SUPPLEMENT POLICIES

The Texas Department of Insurance (TDI) proposes to amend 28 TAC §§3.3309, 3.3312, and 3.3324, concerning requirements for Medicare supplement coverage. The proposed amendments implement House Bill 2516, 89th Legislature, 2025.

EXPLANATION.

The amendments to §§3.3309, 3.3312, and 3.3324 are necessary to implement HB 2516, which added Insurance Code §1652.059 and §1652.060, requiring that individuals younger than 65 who become enrolled in Medicare by reason of end stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS) be given access to the same coverage, and in some cases at the same rates, as those offered to individuals 65 and older. The amendments also clarify the existing language and protections regarding guaranteed issuance and the rating of disabled enrollees when they turn 65, which were discussed in Bulletin #B-0027-21 (available online at www.tdi.texas.gov/bulletins/2021/B-0027-21.html).

Descriptions of the sections' proposed amendments follow.

Section 3.3309.

Proposed amendments to subsection (a)(1) remove language from subparagraphs (D) and (E) related to coverage for outpatient prescription drugs. Those provisions were included to implement the Medicare Prescription Drug Improvement and Modernization Act of 2003 but are no longer relevant.

Proposed amendments to subsection (b) require that Medicare supplement applications elicit information as to whether someone younger than 65 qualifies under HB 2516. These changes are necessary to ensure that issuers have the information to comply with the new requirements. The amendments also delete extraneous language from the subsection.

Proposed amendments to Figure: 28 TAC §3.3309(f) remove a reference to enrollment in Part D, which is no longer needed, and remove unnecessary underlines.

A proposed amendment to subsection (g) revises a reference in the rule text that incorrectly refers to parts of Figure: 28 TAC §3.3309(f) as paragraphs of subsection (f).

Proposed amendments also include nonsubstantive rule drafting and formatting changes for plain language and to conform to the agency's current style and improve clarity. For example, "shall" is changed to "must" throughout the rule text, and "preexisting conditions" is changed to "preexisting condition limitations."

Section 3.3312.

The title of this section is proposed to be amended to add a reference "Notice Requirements" in light of the notification requirement found in new subsection (f) of this section.

Proposed amendments to subsection (a)(1) reference that individuals will indicate on their application that they meet the section's eligibility requirements and submit evidence of eligibility as necessary. An extraneous "and" is deleted in subsection (a)(2).

Proposed amendments to subsection (b) delete paragraphs (7) and (9) relating to enrollment in Medicare Part D and the Texas Health Insurance Pool, as the references in these paragraphs are obsolete and unnecessary, and renumber current paragraph (8) as paragraph (7). New subsection (b)(8) identifies for purposes of other amendments individuals meeting the requirements of Insurance Code §1652.059 and enrolled in Medicare before the effective date of the rule amendments.

An amendment in subsection (c)(1) revises a reference to the paragraphs in subsection (b) to reflect the changes to the paragraphs in that subsection. Subparagraphs (A) and (B) in subsection (c)(1) are amended to implement HB 2516 by clarifying that individuals eligible under that bill are entitled to the same plans that anyone turning 65 is eligible for. To conform to the deletion of subsection (b)(7), subsection (c)(2) is amended to remove provisions related to the removal of prescription drug coverage, and subsection (c)(4) is deleted.

Proposed new subsection (c)(4) implements the protections of HB 2516 by providing that individuals eligible under that bill are entitled to the same plans offered to others by the issuer and may not be subject to separate forms or rates.

An amendment is proposed to delete current subsection (d)(5) to conform to the deletion of subsection (b)(7). Subsequent paragraphs are renumbered.

Subsection (d)(6) is amended to delete the reference to the Texas Health Insurance Pool, as it is obsolete. In accordance with Insurance Code §1652.060(d), which authorizes the commissioner to designate enrollment periods by rule, new text is added in subsection (d)(6) to provide a guaranteed issue period for those eligible under HB 2516 from October 15, 2026, through March 31, 2027. This aligns with Medicare open enrollment periods to support individuals who may switch from a Medicare Advantage plan to traditional Medicare and want to purchase Medicare supplement coverage.

Proposed new subsection (f) requires issuers to provide timely notice to those eligible for the enrollment period created by subsection (d)(6). This will ensure that those eligible under HB 2516 receive notice of their opportunity to realize the benefits of that legislation.

In addition, the proposed amendments include nonsubstantive rule drafting and formatting changes for plain language and to conform the section to the agency's current style and improve clarity. For example, "in accordance with" is changed to "according to," and edits are made to paragraph organization for clarity.

Section 3.3324.

Proposed amendments to subsection (a) make clarifying changes to implement HB 2516. The changes relate to medical underwriting and exceptions to the required availability of Medicare supplement policies and certificates.

Proposed amendments to subsection (b)(1) are necessary to distinguish between requirements for individuals younger than 65 who are eligible under HB 2516 and those who are not.

Proposed amendments to subsection (b)(2) clarify that an individual turning 65 who previously obtained Medicare supplement coverage due to disability and early enrollment in Medicare has the same rights to obtain Medicare supplement coverage at age 65 as anyone else turning 65. If an individual chooses to remain with their plan, they must be charged the same premium as someone enrolling for the first time at age 65.

Proposed new subsection (b)(3) requires notice (beginning 90 days after the effective date of the section) to those enrollees turning 65 of any premium adjustment and new open enrollment period under subsection (b)(2). These changes are consistent with TDI's 2021 Bulletin #B-0027-21 (online at www.tdi.texas.gov/bulletins/2021/B-0027-21.html), which cited CMS' December 2002 guidance, Transmittal No. 02-03 (available online at www.cms.gov/Medicare/Health-Plans/Medigap/Downloads/mdgp0203.pdf), requiring a second open enrollment opportunity at age 65 for Medicare supplement policyholders who obtained coverage before 65 because of disability.

Proposed new subsection (b)(4) implements the requirements of HB 2516 by requiring that qualifying individuals be charged the same rates as others for some plans and no more than 200% of the rates charged others for other plans. It also prohibits application of preexisting condition exclusions or waiting periods to these qualifying individuals.

Proposed new subsection (b)(5) provides that issuers filing for rate increases before January 1, 2028, in which they rely on HB 2516 as justification for the rate increase, must also affirm that the rates for those individuals that do not qualify under HB 2516 will continue to meet the loss ratio standards of 28 TAC §3.3307. This will assist TDI's review of rate increase requests and ensure compliance with rating requirements. In particular, TDI is concerned about cases in which issuers reexamine their rates and increase them when eligible individuals are moved into the larger risk pool of those who become eligible for Medicare at age 65. In those cases, the rates of those individuals younger than 65 who are not eligible under HB 2516 and who remain in a separate risk pool that now no longer includes individuals with ESRD or ALS should also be reexamined to ensure they are not excessive.

In addition, the proposed amendments include nonsubstantive rule drafting and formatting changes for plain language and to conform the section to the agency's current style and improve clarity.

TDI received comments on an informal draft posted on TDI's website on September 4, 2025. TDI considered those comments when drafting this proposal.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT.

Rachel Bowden, director of Regulatory Initiatives in the Life and Health Division, has determined that during each year of the first five years the proposed amendments are in effect, there will be no measurable fiscal impact on state and local governments as a result of enforcing or administering the amendments, other than that imposed by statute. Ms. Bowden made this determination because the proposed amendments do not add to or decrease state revenues or expenditures, and because local governments are not involved in enforcing or complying with the proposed amendments.

Ms. Bowden does not anticipate any measurable effect on local employment or the local economy as a result of this proposal.

PUBLIC BENEFIT AND COST NOTE.

For each year of the first five years the proposed amendments are in effect, Ms. Bowden expects that enforcing them will have the public benefits of ensuring that both TDI's rules and Medicare supplement policies in Texas conform to Insurance Code Chapter 1652 and that consumers with Medicare supplement policies in Texas have the broadest possible options in coverage and rates.

Regarding the proposed HB 2516 amendments, Ms. Bowden expects that the proposed amendments will not increase the cost of compliance for regulated persons because the amendments would not impose requirements beyond those in statute. Insurance Code §1652.059 requires that the same coverage be offered to those younger than 65 enrolled in Medicare by reason of ESRD or ALS as is offered to those 65 or older. The amendments to §3.3309(b), for example, requiring that such eligibility information be elicited, are necessary for issuers to comply with §1652.059. Amendments to §3.3312 and §3.3324 similarly modify the rules to conform to HB 2516. The amendment to §3.3324(b)(5) requiring an actuary to confirm that the rates of those younger than 65 are compliant should not add any measurable cost because issuers are already subject to the loss ratio standards under 28 TAC §3.3307, which would require such an analysis.

Proposed new §3.3312(d)(6) and (f) require notice of a guaranteed issue period for those eligible under HB 2516. Ms. Bowden expects that this could impose an economic cost on persons required to comply because issuers will have to prepare and issue a notice to current insureds regarding the guaranteed issue period and then modify the coverage of responding eligible insureds to comply with HB 2516. If an issuer uses electronic delivery as permitted under Insurance Code Chapter 35, the issuer may send the notices electronically, avoiding paper and printing costs.

If an issuer prints paper copies instead, TDI expects the cost to be between $0.06 and $0.08 per page for printing and paper. An issuer's cost of complying with the requirements will depend on whether the mailing may be included with other information sent to policyholders. TDI expects that each issuer will have the information necessary to determine its individual cost, including in-house printing costs and commercial printing costs. TDI estimates that issuers may face administrative costs associated with creating and sending the notice.

While it is not feasible to determine the actual cost of any employees needed to comply with the requirement, TDI estimates that creating and sending the notice may require the following resources: between eight and 14 hours of compliance officer staff time to create the notice and create processes to effectuate changes to enrollment, and between eight and 14 hours of computer programming staff time to prepare and test systems to begin distributing the notice. Staff costs may vary depending on the skill level required, the number of staff required, and the geographic location where work is done. The 2024 median hourly wage for these positions in Texas was: compliance officer, $34.64; and computer programmer, $38.85; as reported by the Texas Wages and Employment Projections database, which is developed and maintained by the Texas Workforce Commission and located at www.texaswages.com/WDAWages.

Proposed new §3.3324(b)(2) and (3) provide that individuals with coverage before age 65 who turn 65 must be given the same rates as those who enroll at age 65 for the first time and receive notice and an opportunity to change plans. Issuers already appear to be providing the opportunity to change plans due to prior federal and TDI guidance, but there could be a cost to issuers to automatically change rates at age 65 and provide notice of the opportunity to change plans. While it is not feasible to determine the actual cost of any employees needed to comply with the requirement, TDI estimates that creating the notice may require five to 10 hours of compliance officer staff time to create the notice and create processes to effectuate changes to enrollment; and between eight and 14 hours of computer programming staff time to prepare and test systems to distribute the notice and to effectuate changes to enrollment. Because the rule permits the issuer to send the notice any time during the year when the individual is 64, the notice should be able to be sent with other correspondence at no additional cost.

TDI posted an informal draft substantially similar to this proposal on September 4, 2025 (online at www.tdi.texas.gov/rules/documents/33309webcover.pdf).

TDI's posting included the following request for cost information: "TDI seeks input on this draft rule, including input from industry on any costs associated with complying with the informal rule text that are not imposed by the statute. This input will inform the analyses that TDI must include under Government Code Chapter 2001 when it prepares the formal rule proposal. TDI believes that the industry is already complying with most of the provisions in the draft or that any costs not required by HB 2516 would be minimal. If you feel this is wrong, please provide your input to help us understand the additional costs."

No commenter provided information on costs other than a general reference to "administrative burden." Nevertheless, TDI modified the draft text as incorporated into this proposal by giving issuers additional time to implement notification requirements. This change further minimizes the administrative cost to issuers.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS.

TDI has determined that the proposed amendments may have a minimal adverse economic effect on issuers that are small or micro businesses. The cost analysis in this proposal's Public Benefit and Cost Note section also applies to these small and micro businesses. TDI estimates that the proposed amendments may affect less than 10 issuers that are small or micro businesses. The primary objectives of this proposal are to implement HB 2516 and its protections for under-65 Medicare-eligible individuals and to provide protections for those turning 65 who are already enrolled in a Medicare supplement policy. TDI considered the following alternatives to minimize any adverse impact on small and micro businesses while accomplishing the proposal's objectives:

(1) entirely declining to propose, or postponing the implementation of, some requirements that might impose costs on small and micro issuers;

(2) giving small and micro issuers additional time to come into compliance with the rule amendments; and

(3) exempting small and micro issuers from some of the rule amendments.

Regarding alternative (1), TDI made changes from the draft text that it posted in September to reduce administrative costs on all issuers by giving issuers additional time to implement notification requirements. This change may also reduce the administrative costs to small and micro issuers.

TDI rejected alternative (2), providing additional time to small and micro issuers, because the requirements of the proposed amendments are either required by statute or involve timeframes for notification to insureds that would be ineffective if postponed or would cause confusion in the market if different timeframes applied to different issuers.

TDI similarly rejected alternative (3), exempting small and micro issuers from some of the proposed requirements, because many of the proposed amendments are required by statute, which contains no exemption for small or micro issuers, or are necessary for the protection of all insureds, regardless of their issuer's size.

EXAMINATION OF COSTS UNDER GOVERNMENT CODE §2001.0045.

TDI has determined that this proposal might impose a possible cost on regulated persons. However, no additional rule amendments are required under Government Code §2001.0045, in part because, as discussed, the proposed rule text is necessary to implement legislation. The proposed rule implements Insurance Code §1652.059 and §1652.060, as added by HB 2516.

Proposed new §3.3312(d)(6) and (f) require notice of a guaranteed issue period for those newly eligible under HB 2516. Ms. Bowden expects that this could impose an economic cost on persons required to comply because issuers will have to prepare and issue a notice to current insureds about the guaranteed issue period and then modify the coverage of those responding eligible insureds to comply with HB 2516. Government Code §2001.0045 does not apply to these amendments because they are necessary to implement legislation.

Specifically, new Insurance Code §1652.060(d), under HB 2516, provides that "[t]he commissioner shall adopt rules as necessary to administer this section, including rules designating enrollment periods." While HB 2516 does not explicitly mention notice to insureds of their enrollment opportunities, Insurance Code §1652.051 requires the commissioner to adopt reasonable standards for facilitating comparisons of different Medicare supplement benefit plans which may include "provisions relating to . . . initial and subsequent conditions of eligibility." Notice to insureds of their eligibility to change plans is essential to facilitating their comparison of those plans and is necessary to administer new §1652.060.

Proposed new §3.3324(b)(2) and (3) provide that individuals with coverage before age 65 who turn 65 must be given the same rates as those who enroll at age 65 for the first time and receive notice and an opportunity to change plans. Issuers already appear to be providing the opportunity to change plans due to prior federal and TDI guidance. See www.cms.gov/Medicare/Health-Plans/Medigap/Downloads/mdgp0203.pdf.

This opportunity to change plans is required by federal law, and Insurance Code §1652.005 requires that TDI adopt rules necessary to retain certification as a state with an approved regulatory program. Also, Insurance Code §1652.051 requires the commissioner to adopt reasonable rules, which may include provisions relating to initial and subsequent conditions of eligibility. Further, Government Code §2001.0045(c)(4) provides that the requirements of that section do not apply to a rule that is necessary to comply with federal law. The additional provisions requiring re-rating and notice are also necessary to implement the requirement in Insurance Code §1652.051 to adopt rules facilitating comparisons of different Medicare supplement benefit plans, including "provisions relating to . . . initial and subsequent conditions of eligibility." They are also necessary to protect the health, safety, and welfare of vulnerable senior residents of this state.

GOVERNMENT GROWTH IMPACT STATEMENT.

TDI has determined that for each year of the first five years that the proposed amendments are in effect, the proposed rule:

- will not create or eliminate a government program;

- will not require the creation of new employee positions or the elimination of existing employee positions;

- will not require an increase or decrease in future legislative appropriations to the agency;

- will not require an increase or decrease in fees paid to the agency;

- will create a new regulation;

- will expand, limit, or repeal an existing regulation;

- will not increase or decrease the number of individuals subject to the rule's applicability; and

- will not positively or adversely affect the Texas economy.

TAKINGS IMPACT ASSESSMENT.

TDI has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action. As a result, this proposal does not constitute a taking or require a takings impact assessment under Government Code §2007.043.

REQUEST FOR PUBLIC COMMENT.

TDI will consider any written comments on the proposal that are received by TDI no later than 5:00 p.m., central time, on June 17, 2026. Consistent with Government Code §2001.024(a)(8), TDI requests public comments on the proposal, including information related to the cost, benefit, or effect of the proposal and any applicable data, research, and analysis. Send your comments to ChiefClerk@tdi.texas.gov or to the Office of the Chief Clerk, MC: GC-CCO, Texas Department of Insurance, P.O. Box 12030, Austin, Texas 78711-2030.

The commissioner of insurance will also consider written and oral comments on the proposal in a public hearing under Docket No. 2867. This proposal will be part of a rule hearing docket that will begin at 1:00 p.m., central time, on June 15, 2026. TDI will hold the public hearing both remotely using online resources and in person at the Barbara Jordan State Office Building, 1601 Congress Avenue, Austin, Texas 78701 in Room 2.029. Visit www.tdi.texas.gov/alert/event/index.html for more info on the proposed rule, hearing, and comment submission.

STATUTORY AUTHORITY.

TDI proposes amendments to §§3.3309, 3.3312, and 3.3324 under Insurance Code §§1652.005, 1652.051, 1652.060, 1652.101, 1652.103, 1701.060, and 36.001.

Insurance Code §1652.005 requires the commissioner to adopt reasonable rules necessary and proper to carry out Insurance Code Chapter 1652, including rules necessary to retain federal certification as a state with an approved regulatory program.

Insurance Code §1652.051 requires the commissioner to adopt reasonable rules to establish standards for provisions in Medicare supplement benefit plans and standards for facilitating comparisons between different Medicare supplement plans. The standards may include provisions relating to initial and subsequent conditions of eligibility. These rules may also include reasonable rules that specifically prohibit plan provisions that are not otherwise specifically authorized by statute and that the commissioner determines are unjust, unfair, or unfairly discriminatory.

Insurance Code §1652.060 requires the commissioner to adopt rules as necessary to administer that section, including rules designating enrollment periods.

Insurance Code §1652.101 requires the commissioner to adopt reasonable rules to establish minimum loss ratio standards for Medicare supplement plans.

Insurance Code §1652.103 requires the commissioner by rule to provide a process for reviewing and approving or disapproving a proposed premium increase relating to Medicare supplement plans.

Insurance Code §1701.060 gives the commissioner general rulemaking authority to adopt reasonable rules necessary to implement the purposes of Insurance Code Chapter 1701, including rules that establish procedures and criteria under which forms will be reviewed.

Insurance Code §36.001 provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of TDI under the Insurance Code and other laws of this state.

CROSS-REFERENCE TO STATUTE.

Amendments to §3.3309 implement Insurance Code §1652.059. Amendments to §3.3312 and §3.3324 implement Insurance Code §§31.002, 1652.005, 1652.051, 1652.059, 1652.060, 1652.101, 1652.103, and 1701.060.

§3.3309. Requirements for Application Forms and Replacement Coverage.

(a) Application forms must [shall] include the following information, statements, and questions designed to elicit information as to whether, as of the date of the application, the applicant currently has another Medicare supplement, Medicare Advantage, Medicaid coverage, or other health insurance policy or certificate in force or whether a Medicare supplement policy or certificate is intended to replace any other accident and sickness policy or certificate currently in force. A supplementary application or other form to be signed by the applicant and agent, except where the coverage is sold without an agent, containing such questions may be used.

(1) The information must [shall] be provided to prospective covered persons in statement form conforming to subparagraphs (A) - (F) of this paragraph.

(A) You do not need more than one Medicare supplement policy.

(B) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need more than one type of coverage in addition to your Medicare benefits.

(C) You may be eligible for benefits under Medicaid and may not need a Medicare supplement policy.

(D) If, after purchasing this policy, you become eligible for Medicaid, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, during your entitlement to benefits under Medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for Medicaid. If you are no longer entitled to Medicaid, your suspended Medicare supplement policy (or, if that is no longer available, a substantially equivalent policy) will be reinstituted if requested within 90 days of losing Medicaid eligibility. [If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.]

(E) If you are eligible for, and have enrolled in, a Medicare supplement policy by reason of disability and you later become covered by an employer or union-based group health plan, the benefits and premiums under your Medicare supplement policy can be suspended, if requested, while you are covered under the employer or union-based group health plan. If you suspend your Medicare supplement policy under these circumstances, and later lose your employer or union-based group health plan, your suspended Medicare supplement policy (or, if that is no longer available, a substantially equivalent policy) will be reinstituted if requested within 90 days of losing your employer or union-based group health plan. [If the Medicare supplement policy provided coverage for outpatient prescription drugs and you enrolled in Medicare Part D while your policy was suspended, the reinstituted policy will not have outpatient prescription drug coverage, but will otherwise be substantially equivalent to your coverage before the date of the suspension.]

(F) Counseling services may be available in your state to provide advice concerning your purchase of Medicare supplement insurance and concerning medical assistance through the state Medicaid program, including benefits as a Qualified Medicare Beneficiary (QMB) and a Specified Low-Income Medicare Beneficiary (SLMB).

(2) Information must [shall] be elicited from prospective covered persons by asking the following questions [as follows]: If you lost or are losing other health insurance coverage and received a notice from your prior insurer saying you were eligible for guaranteed issue of a Medicare supplement insurance policy, or that you had certain rights to buy such a policy, you may be guaranteed acceptance in one or more of our Medicare supplement plans. Please include a copy of the notice from your prior insurer with your application. PLEASE ANSWER ALL QUESTIONS. Please mark Yes or No below with an "X" to the best of your knowledge.

(A) Did you turn age 65 in the last 6 months? Yes____ No____

(B) Did you enroll in Medicare Part B in the last 6 months? Yes____ No____

(C) If yes, what is the effective date?

(D) Are you covered for medical assistance through the state Medicaid program?

(i) {NOTE TO APPLICANT: If you are participating in a "Spend-Down Program" and have not met your "Share of Cost," please answer NO to this question.} Yes____ No____

(ii) If yes;

(I) Will Medicaid pay your premiums for this Medicare supplement policy? Yes____ No____

(II) Do you receive any benefits from Medicaid OTHER THAN payments toward your Medicare Part B premium? Yes____ No____

(E) If you had coverage from any Medicare plan other than original Medicare within the past 63 days (for example, a Medicare Advantage plan, or a Medicare HMO or PPO), fill in your start and end dates below. If you are still covered under this plan, leave "END" blank. START __/__/__ END __/__/__

(i) If you are still covered under the Medicare plan, do you intend to replace your current coverage with this new Medicare supplement policy? Yes____ No____

(ii) Was this your first time in this type of Medicare plan? Yes____ No____

(iii) Did you drop a Medicare supplement policy to enroll in the Medicare plan? Yes____ No____

(F) Do you have another Medicare supplement policy in force? Yes____ No____

(i) If so, with what company, and what plan do you have {optional for Direct Mailers}?

(ii) If so, do you intend to replace your current Medicare supplement policy with this policy? Yes____ No____

(G) Have you had coverage under any other health insurance within the past 63 days? (For example, an employer, union, or individual plan) Yes____ No____

(i) If so, with what company and what kind of policy?

(ii) What are your dates of coverage under the other policy? START __/__/__ END __/__/__ (If you are still covered under the other policy, leave "END" blank.)

(b) Application forms must [shall] include questions to elicit information as to whether the applicant qualifies under Insurance Code §1652.059, concerning Coverage for Certain Individuals Younger Than 65, is an eligible person as defined in §3.3312(b) of this title (relating to Guaranteed Issue for Eligible Persons; Notice Requirements), or [whether the applicant] is eligible for reduction of any applicable preexisting condition limitation under §3.3324(c) and (d) of this title (relating to Open Enrollment).

(c) Agents must list [shall list the following]:

(1) any other health insurance policies or coverages sold to the applicant that [which] are still in force; and

(2) any other health insurance policies or coverages sold to the applicant in the past five years that [which] are no longer in force.

(d) In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant[,] and acknowledged by the issuer, must [shall] be returned to the applicant by the issuer upon delivery of the policy.

(e) Upon determining that a sale will involve replacement of Medicare supplement coverage, any issuer, other than a direct response issuer, or its agent, must [shall] furnish a notice regarding replacement of Medicare supplement coverage to the applicant[,] before [prior to] issuance or delivery of the Medicare supplement policy or certificate[, a notice regarding replacement of Medicare supplement coverage]. One copy of the [such] notice signed by the applicant and the agent, except where the coverage is sold without an agent, must [shall] be provided to the applicant, and an additional signed copy must [shall] be retained by the issuer. A direct response issuer must [shall] deliver to the applicant at the time of the issuance of the policy the notice regarding replacement of Medicare supplement coverage.

(f) The notice required by subsection (e) of this section must [shall] be provided in substantially the following form and must [shall] be in a typeface no smaller than 12-point type.

Figure: 28 TAC 3.3309(f) (.pdf)

[Figure: 28 TAC 3.3309(f)]

(g) The items found in paragraphs (1) and (2) of Figure: 28 TAC §3.3309(f) apply to preexisting condition limitations and [Subsection (f)(1) and (2) of this section (applicable to preexisting conditions)] may be deleted by an issuer if the replacement does not involve application of a new preexisting condition limitation.

§3.3312. Guaranteed Issue for Eligible Persons; Notice Requirements.

(a) Guaranteed issue.

(1) Eligible persons are those individuals described in subsection (b) of this section who seek to enroll under the Medicare supplement policy during the period specified in subsection (d) of this section, who indicate on the application for a Medicare supplement policy that they meet the requirements of this section, and who submit evidence of eligibility as necessary, such as the date of termination, disenrollment, or Medicare Part D enrollment with the application for a Medicare supplement policy.

(2) With respect to eligible persons, an issuer must not deny or condition the issuance or effectiveness of a Medicare supplement policy described in subsection (c) of this section that is offered and is available for issuance to newly enrolled individuals by the issuer ; [ , and ] must not discriminate in the pricing of a Medicare supplement policy because of health status, claims experience, receipt of health care, or medical condition ; [ , ] and must not impose an exclusion of benefits based on a preexisting condition under a Medicare supplement policy.

(b) Eligible persons. An eligible person is an individual described in any of the following paragraphs . [ : ]

(1) The individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare, and the plan terminates, or the plan ceases to provide supplemental health benefits to the individual; or the individual is enrolled under an employee welfare benefit plan that is primary to Medicare and the plan terminates or the plan ceases to provide all health benefits to the individual because the individual leaves the plan.

(2) The individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under Part C of Medicare, and any of the following circumstances apply, or the individual is age 65 [ years of age ] or older and is enrolled with a Program of All-Inclusive Care for the Elderly (PACE) provider under §1894 of the Social Security Act, and there are circumstances similar to the following that would permit discontinuance of the individual's enrollment with the provider if the individual were enrolled in a Medicare Advantage plan:

(A) the certification of the organization or plan has been terminated; [ or ]

(B) the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides;

(C) the individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances specified by the Secretary, but not including termination of the individual's enrollment on the basis described in §1851(g)(3)(B) of the Social Security Act (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under §1856), or the plan is terminated for all individuals within a residence area;

(D) the individual demonstrates, according to [ in accordance with ] guidelines established by the Secretary, that:

(i) the organization offering the plan substantially violated a material provision of the organization's contract under 42 U.S.C. Chapter 7, Subchapter XVIII, Part D , in relation to the individual, including the failure to provide an individual on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide the covered care according to [ in accord with ] applicable quality standards; or

(ii) the organization, [ or ] agent, or other entity acting on the organization's behalf[ , ] materially misrepresented the plan's provisions in marketing the plan to the individual; or

(E) the individual meets other exceptional conditions as the Secretary may provide.

(3) The individual is enrolled with an entity listed in subparagraphs (A) - (D) of this paragraph and enrollment ceases under the same circumstances that would permit discontinuance of an individual's election of coverage under paragraph (2) of this subsection:

(A) an eligible organization under a contract under §1876 of the Social Security Act (Medicare cost);

(B) a similar organization operating under demonstration project authority, effective for periods before April 1, 1999;

(C) an organization under an agreement under §1833(a)(1)(A) of the Social Security Act (health care prepayment plan); or

(D) an organization under a Medicare Select policy . [ ; and ]

(4) The [ the ] individual is enrolled under a Medicare supplement policy and the enrollment ceases because:

(A) of the insolvency of the issuer or bankruptcy of the nonissuer organization; or of other involuntary termination of coverage or enrollment under the policy;

(B) the issuer of the policy substantially violated a material provision of the policy; or

(C) the issuer, an agent, or other entity acting on the issuer's behalf[ , ] materially misrepresented the policy's provisions in marketing the policy to the individual . [ ; ]

(5) The [ the ] individual was enrolled under a Medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under Part C of Medicare, any eligible organization under a contract under §1876 of the Social Security Act (Medicare cost), any similar organization operating under demonstration project authority, any PACE provider under §1894 of the Social Security Act, or a Medicare Select policy; and the subsequent enrollment is terminated by the individual during any period within the first 12 months of the subsequent enrollment (during which time the individual is permitted to terminate the subsequent enrollment under §1851(e) of the Social Security Act) . [ ; or ]

(6) The [ the ] individual, on first becoming enrolled in Medicare Part B [ for benefits at age 65 or older ], enrolls in a Medicare Advantage plan under Part C of Medicare, or with a PACE provider under §1894 of the Social Security Act, and disenrolls from the plan or program no later than 12 months after the effective date of enrollment.

(7) [ (8) ] The individual loses eligibility for health benefits under Title XIX of the Social Security Act (Medicaid).

(c) Products that [ to which ] eligible persons are entitled to .

(1) Persons described by subsection (b)(1), (2), (3), (4), and (7) [ (8), and (9) ] of this section are entitled to a Medicare supplement policy that has a benefit package classified as follows:

(A) Plan A, B, C, F (including F with a High Deductible), K, or L offered by any issuer, for an individual age 65 [ years of age ] or older , or an individual who meets the criteria in Insurance Code §1652.059, who first became eligible for Medicare before January 1, 2020, except that for persons under age 65 who do not meet the criteria in Insurance Code §1652.059 [ years of age ] , it is a policy that has a benefit package classified as Plan A; or

(B) Plan A, B, D, G (including G with a High Deductible), K, or L offered by any issuer, for a 2020 newly eligible individual who is age 65 [ years of age ] or older or meets the criteria in Insurance Code §1652.059 , except that for persons under age 65 who do not meet the criteria in Insurance Code §1652.059 [ years of age ] , it is a policy that has a benefit package classified as Plan A.

(2) Persons described by subsection (b)(5) of this section are entitled to the same Medicare supplement policy in which the individual was most recently enrolled, if available from the same issuer or, if not available, a policy described in paragraph (1) of this subsection. [ If the individual was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit, the Medicare supplement policy described in this paragraph is the policy available from the same issuer but modified to remove outpatient prescription drug coverage, or at the election of the policyholder, a policy described in paragraph (1) of this subsection. ]

(3) Persons described by subsection (b)(6) of this section are entitled to any Medicare supplement policy offered by any issuer, with the exception of Plans [ plans ] C or F (including F with a High Deductible) for a 2020 newly eligible individual.

(d) Guaranteed issue time period.

(1) In the case of an individual described in subsection (b)(1) of this section:

(A) for a plan that supplements the benefits under Medicare, the guaranteed issue period begins on the later of:

(i) the date the individual receives a notice of termination or cessation of all supplemental health benefits (or, if a notice is not received, the date the individual receives notice that a claim has been denied because of the termination or cessation); or

(ii) the date the applicable coverage terminates or ceases; [ and ends 63 days later; ] or

(B) for a plan that is primary to the benefits under Medicare, the guaranteed issue period begins on the later of:

(i) the date the individual receives a notice of termination or cessation of all health benefits (or if a notice is not received, the date the individual receives notice that a claim has been denied because of the termination or cessation); or

(ii) the date the applicable coverage terminates or ceases; and [ ends 63 days later. ]

(2) In the case of an individual described in subsection (b)(2), (3), (5), or (6) of this section whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated.

(3) In the case of an individual described in subsection (b)(4)(A) of this section, the guaranteed issue period begins on the earlier of the date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar notice, if any, and the date that the applicable coverage is terminated, and ends on the date that is 63 days after the date the coverage is terminated.

(4) In the case of an individual described in subsection (b)(2), (4)(B) and (C), (5), or (6) of this section, who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date of disenrollment.

(5) [ (6) ] In the case of an individual described in subsection (b) of this section, but not described in paragraphs (1) - (5) of this subsection, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date of disenrollment.

(6) [ (7) ] In the case of an individual described in subsection (b)(8) [ (b)(9) ] of this section, the guaranteed issue period is October 15, 2026, through March 31, 2027. [ begins on the date that the individual's coverage in the Texas Health Insurance Pool terminates and ends 63 days later. ]

(e) Extended Medicare supplement access for interrupted trial periods.

(1) In the case of an individual described in subsection (b)(5) of this section (or deemed to be so described under this paragraph), whose enrollment with an organization or provider described in subsection (b)(5) of this section is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls with another organization or provider, the subsequent enrollment will be deemed to be an initial enrollment as described in subsection (b)(5) of this section.

(2) In the case of an individual described in subsection (b)(6) of this section (or deemed to be so described under this paragraph), whose enrollment with a plan or in a program described in subsection (b)(6) of this section is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls with another plan or program, the subsequent enrollment will be deemed to be an initial enrollment as described in subsection (b)(6) of this section.

(3) For purposes of subsection (b)(5) and (6) of this section, no enrollment of an individual with an organization or provider described in subsection (b)(5) of this section, or with a plan or in a program described in subsection (b)(6) of this section, may be deemed to be an initial enrollment under this paragraph after the two-year [ 2-year ] period beginning on the date that [ on which ] the individual first enrolled with the organization, provider, plan, or program.

§ 3.3324. Open Enrollment.

(a) Except as otherwise provided in this section, no [ No ] issuer may deny or condition the issuance or effectiveness of any Medicare supplement policy or certificate available for sale in this state, subject an applicant to medical underwriting, nor discriminate in the pricing of a policy or certificate because of the health status, claims experience, receipt of health care, or medical condition of an applicant where an application for a policy or certificate is submitted before or during the six-month period beginning with the first day of the first month in which an individual is first enrolled for benefits under Medicare Part B. No issuer may engage in a premium rating practice that results in higher premiums for any policy solely because the policy is issued under the provisions of this section. An issuer must make available [ For individuals 65 years of age or older when first enrolled for benefits under Medicare Part B who apply for Medicare supplement coverage under this subsection, ] each Medicare supplement policy and certificate [ currently available from an issuer must be made available ] to all applicants who apply for coverage under this section without regard to age , subject to the following exceptions: [ . ]

(b) The provisions [ of paragraphs (1) and (2) ] of this subsection apply to Medicare supplement issuers with respect to persons who qualify for Medicare before age 65 [ attaining 65 years of age ].

(1) For individuals who do not qualify under Insurance Code §1652.059, concerning Coverage for Certain Individuals Younger Than 65, an issuer must make available, at a minimum, Plan A of the standard Medicare supplement plans to an individual who qualifies under this subsection and may establish a separate form and rating class as permitted under §3.3322 of this title for similarly situated individuals who enroll in Plan A under this section. [ An issuer must comply with the first two sentences of subsection (a) of this section with respect to a person who: ]

(2) When an individual who is enrolled in a plan under this subsection reaches age 65, the individual is entitled to an open enrollment period under subsection (a) of this section as if the individual had enrolled in Medicare Part B on their 65th birthday, and the issuer must begin charging the premium rate that would apply to a new applicant under subsection (a) of this section. [ An issuer must make available, at a minimum, Plan A of the standard Medicare supplement plans to individuals who qualify under this subsection. ]

(c) If an applicant qualifies under subsection (a) of this section, is age 65 [ years of age ] or older, and submits an application during the period referenced in subsection (a) of this section and, as of the date of application , has had a continuous period of creditable coverage :

(1) [ has had a continuous period of creditable coverage ] of at least six months, the issuer may not exclude benefits based on a preexisting condition; or

(2) [ has had a continuous period of creditable coverage ] that is less than six months, the issuer must reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date.

(d) Except as provided in subsection (c) of this section, §3.3312 of this title (relating to Guaranteed Issue for Eligible Persons ; Notice Requirements ), and §3.3306(b)(1)(A) of this title (relating to Minimum Benefit Standards), subsection (a) of this section may not be construed as preventing the exclusion of benefits under a policy during the first six months based on a preexisting condition for which the policyholder or certificate holder received treatment or was otherwise diagnosed during the six months before the coverage became effective.

(e) The following examples illustrate the application of subsection (c)(1) and (2) of this section, as prescribed by the Secretary:

(1) Individual A--[ " ] No preexisting condition exclusion period. Relevant creditable coverage history: Individual A had coverage under an individual policy for four months beginning on May 1, 1998, through August 31, 1998, followed by a gap in coverage of 61 days until October 31, 1998. Individual A had coverage under an individual health plan beginning on November 1, 1998, for three months through January 31, 1999, followed by a gap in coverage of 59 days or until March 31, 1999, on which date Individual A submitted an application for a Medicare supplement policy. Under this example, the Medicare supplement issuer may not apply a preexisting condition exclusion period because Individual A has seven months of creditable coverage without a gap in coverage greater than 63 days.

(2) Individual B--[ " ] Subject to a three-month preexisting condition exclusion period. Relevant creditable coverage history: Individual B is covered under an individual health insurance policy for one month beginning May 1, 1998, through May 31, 1998, followed by a gap in coverage of 61 days from June 1, 1998, through July 31, 1998. On August 1, 1998, Individual B is covered under an association health plan for two months through September 30, 1998, followed by a gap in coverage of 31 days or until October 31, 1998, on which date Individual B submitted an application for Medicare supplement coverage. Individual B has three months of creditable coverage. Under this example, the issuer of a Medicare supplement policy must give Individual B a three-month credit against any preexisting condition exclusion period.

(3) Individual C--[ " ] Subject to a six-month preexisting condition exclusion period. Relevant creditable coverage history: Individual C is covered under an individual health insurance policy for one month beginning May 1, 1998, through May 31, 1998, followed by a gap in coverage of 61 days from June 1, 1998, through July 31, 1998. On August 1, 1998, Individual C is covered under an association health plan for two months through September 30, 1998, followed by a gap in coverage of 64 days or until November 4, 1998, on which date Individual C submitted an application for Medicare supplement coverage. Individual C has a gap in coverage of greater than 63 days. As a result, under this example, the Medicare supplement issuer can fully apply the preexisting condition exclusion provision to Individual C.

(f) Invitation to contract advertisements, as defined in §21.113(b) of this title (relating to Rules Pertaining Specifically to Accident and Health Insurance Advertising and Health Maintenance Organization Advertising), must include the following statement: "Benefits and premiums under this policy may be suspended for up to 24 months if you become entitled to benefits under Medicaid. You must request that your policy be suspended within 90 days of becoming entitled to Medicaid. If you lose (are no longer entitled to) benefits from Medicaid, this policy can be reinstated if you request reinstatement within 90 days of the loss of such benefits and pay the required premium."

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 30, 2026.

TRD-202601857

Jessica Barta

General Counsel

Texas Department of Insurance

Earliest possible date of adoption: June 14, 2026

For further information, please call: (512) 676-6555

CHAPTER 5. PROPERTY AND CASUALTY INSURANCE

SUBCHAPTER W. CONSUMER RIGHTS NOTICES

(Editor's note: In accordance with Texas Government Code, §2002.014, which permits the omission of material which is "cumbersome, expensive, or otherwise inexpedient," the figures in 28 TAC §5.9970(b) and §5.9971(b) are not included in the print version of the Texas Register. The figures are available in the on-line version of the May 15, 2026, issue of the Texas Register.)

The Texas Department of Insurance (TDI) proposes to amend 28 TAC §5.9970 and §5.9971, concerning the Consumer Bills of Rights for personal automobile insurance and residential property insurance. Amendments to both sections implement Senate Bills 458, 1238, 1644, and House Bill 2067, 89th Legislature, 2025.

EXPLANATION. Under Insurance Code Chapter 501, Office of Public Insurance Counsel (OPIC) represents the interest of insurance consumers in Texas. OPIC is required by Insurance Code §501.156 to submit to TDI for adoption a consumer bill of rights appropriate to each personal line of insurance TDI regulates. These bills of rights explain to consumers how their rights are affected by applicable statutes and rules and are to be distributed by insurers to each policyholder on issuance of a policy.

TDI received a petition from OPIC on August 27, 2025, requesting adoption of a revised Consumer Bill of Rights for Personal Automobile Insurance (Auto Bill of Rights) and Consumer Bill of Rights for Homeowners, Dwelling, Renters Insurance (Homeowners Bill of Rights). OPIC's petition provided updated bills of rights to reflect multiple changes made by bills from the 89th Legislature. The current versions were adopted in 2024. Since the last amendment, the following legislation has been passed, affecting the rights of insurance consumers:

- HB 2067 amended Insurance Code §551.109, which requires insurance companies to tell policyholders or applicants in writing why an insurance policy was declined, canceled, or nonrenewed.

- SB 1238 amended Insurance Code §544.002, which prohibits insurance companies from discrimination based on an insured's marital status following a spousal death.

- SB 1644 created Insurance Code §559.058, which requires insurance companies to review and update an insured's credit reports, reassess the insured's policy rating, and adjust premiums on the basis of the insured's updated credit score at least every three years. Insurance Code §559.058 also allows an insured to request that the insurance company re-underwrite and re-rate the policy on the basis of a current credit report or insurance score once per year.

- SB 458 created Insurance Code Chapter 1813. Chapter 1813 requires certain personal auto and residential property insurance policies to include an appraisal provision to resolve disputes about loss amounts.

Personal lines insurers must distribute the Auto Bill of Rights and the Homeowner Bill of Rights to each policyholder on issuance of a new policy or on renewal if the updated bill of rights was not previously sent. Amending the Auto Bill of Rights and Homeowner Bill of Rights ensures that insurers distribute current consumer rights information to policyholders.

Descriptions of the sections' proposed amendments follow.

Section 5.9970. The amendments to §5.9970 update the English and Spanish translation versions of the Auto Bill of Rights included in subsection (b) as FIGURE 1: 28 TAC §5.9970(b) and FIGURE 2: 28 TAC §5.9970(b).

The proposed new English and Spanish translation versions of the Auto Bill of Rights contain changes from the previous versions resulting from legislative actions that affect the rights of insurance consumers. The changes, resulting from recent bills and reflecting new information for policyholders, include:

- the right to request appraisal to resolve disputes about loss amounts (SB 458);

- the right to a written explanation for a cancelation or nonrenewal of an insurance policy (HB 2067);

- how insurers must use updated credit information and the right to request an insurer to re-underwrite and re-rate the policy based on current credit information (SB 1644); and

- the right to not be discriminated against following a spousal death (SB 1238).

These amendments will ensure that the Auto Bill of Rights is consistent with the law and that consumers are informed of their rights related to their personal automobile insurance policies.

Section 5.9971.

The amendments to §5.9971 update the English and Spanish translation versions of the Homeowner Bill of Rights included in subsection (b) as FIGURE 1: 28 TAC §5.9971(b) and FIGURE 2: 28 TAC §5.9971(b).

The proposed new English and Spanish translation versions of the Homeowner Bill of Rights contain changes from the previous versions resulting from legislative actions that affect the rights of insurance consumers. The changes, resulting from recent bills and reflecting new information for policyholders, include:

- the right to request appraisal to resolve disputes about loss amounts (SB 458);

- the right to a written explanation for a cancelation or nonrenewal of an insurance policy (HB 2067);

- how insurers must use updated credit information and the right to request an insurer to re-underwrite and re-rate the policy based on current credit information (SB 1644); and

- the right to not be discriminated against following a spousal death, to reflect changes from HB 1238.

These amendments will ensure that the Auto Bill of Rights is consistent with the law and that consumers are informed of their rights related to their personal automobile insurance policies.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Kristi Jordan, assistant director of the Property and Casualty Division, has determined that during each year of the first five years the proposed amendments are in effect, there will be no measurable fiscal impact on state and local governments as a result of enforcing or administering the amendments. Ms. Jordan made this determination because the proposed amendments do not add to or decrease state revenues or expenditures, and because local governments are not involved in enforcing or complying with the proposal.

Ms. Jordan does not anticipate any measurable effect on local employment or the local economy as a result of this proposal because the proposal simply updates documents insurers are already required to provide.

PUBLIC BENEFIT AND COST NOTE.

For each year of the first five years the proposed amendments are in effect, Ms. Jordan expects public benefits to include consumers receiving an accurate and understandable summary of their rights related to personal automobile and homeowners insurance policies and facilitating public awareness of insurance consumer rights.

Ms. Jordan expects that the proposed amendments will impose an economic cost on persons required to comply. The cost will vary based on the lines of insurance and number of policyholders for each insurer.

Insurance Code §501.156 and TDI rules require insurers to deliver the Auto Bill of Rights and Homeowner Bill of Rights to policyholders at the time a policy is issued or renewed. Because the proposed amendments update existing documents already required to be provided with insurance policies, the amendments do not impose new duties. Insurers must provide policyholders with copies of the updated Auto Bill of Rights and Homeowner Bill of Rights at the first renewal after the rule becomes effective.

An insurer's cost of complying with this requirement will depend on the number of renewals that the insurer provides and on the number of paper bills of rights the insurer sends. TDI expects that each insurer will have the information necessary to determine its individual cost, including the number of pages to be printed, in-house printing costs, and commercial printing costs.

TDI estimates that insurers may face administrative costs associated with updating the Auto Bill of Rights and Homeowner Bill of Rights in their systems. While it is not feasible to determine the actual cost of any employees needed to comply with the requirement, TDI estimates that amending the Auto Bill of Rights and Homeowner Bill of Rights may require between 4 and 10 hours of:

- compliance officer staff time to update internal procedures so the revised bill of rights is distributed; and

- computer programming staff time to prepare and test systems to begin distributing the revised bill of rights.

Staff costs may vary depending on the skill level required, the number of staff required, and the geographic location where work is done. The 2024 median hourly wage for these positions in Texas was:

- compliance officer, $34.64; and

- computer programmer, $38.85.

These wages are as reported by the Texas Wages and Employment Projections database, which is developed and maintained by the Texas Workforce Commission, and can be found at www.texaswages.com/WDAWages. Information on median wages in other states may be obtained directly from the federal Bureau of Labor Statistics website at www.bls.gov/oes/current/oes_nat.htm.

Subject to the requirements for conducting business electronically under Insurance Code Chapter 35, insurers may send the updated Auto Bill of Rights and Homeowner Bill of Rights electronically, avoiding paper and printing costs. If an insurer prints paper copies of the Auto Bill of Rights and Homeowner Bill of Rights, TDI expects the cost to be between $0.03 and $0.05 per page for printing and paper. The Auto Bill of Rights and Homeowner Bill of Rights are both eight pages.

TDI does not anticipate additional costs for mailing or electronic distribution because the new bills of rights will be sent out in new and renewal packets that insurers already send.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. TDI has determined that this proposal may have an adverse economic effect on any insurers that are small or micro businesses. In data the Texas Comptroller of Public Accounts provides for use in calculating the number of small businesses, its estimates indicate that there are approximately 124 insurance carriers that are considered "small businesses" as defined in Government Code §2006.001. The Economic Impact Statement and Regulatory Flexibility Analysis and the cost analysis in the Public Benefit and Cost Note section of this proposal apply to the portion of insurance carriers that write personal automobile or residential property insurance policies and are small and micro businesses. The total cost to an insurer to provide the revised bill of rights to its policyholders is not wholly dependent on the size of the insurer. Rather, the cost depends on the insurer's number of current and future policyholders. TDI does not anticipate an impact on any rural communities because the requirement to distribute bills of rights under Insurance Code §501.156 applies to insurers, not to rural communities.

In accordance with Government Code §2006.002(c-1), TDI considered the following alternatives to minimize any adverse impact on small or micro businesses while still accomplishing the proposal's objectives:

(1) not proposing the amended rules and figures;

(2) imposing different rules for small or micro business; and

(3) exempting small or micro businesses from the proposed requirements that could create an adverse effect.

Not proposing the amended rules and figures Insurance Code §501.156 requires OPIC to submit to TDI for adoption a consumer bill of rights appropriate to each personal line of insurance TDI regulates. The statute requires these consumer bills of rights to be distributed upon issuance of a policy by insurers to all applicable policyholders. Updating the Auto Bill of Rights and Homeowner Bill of Rights is necessary to reflect legislative and regulatory actions that affect the rights of insurance policyholders despite any possible impact on small or micro businesses. To ensure compliance with the statutory requirements, TDI rejected this option.

Imposing different rules for small or micro businesses . The proposed amendments are necessary to comply with statutes and rules that require all insurers to issue the Auto Bill of Rights and Homeowner Bill of Rights to policyholders on issuance of a new or renewal policy. These statutory requirements apply to all personal automobile and homeowner insurers, regardless of size. The requirements cannot be waived or modified for small or micro businesses. For these reasons, TDI rejected this option.

Exempting small or micro businesses from the rule requirement that could create an adverse effect . The purpose of any consumer bill of rights is to notify each policyholder of their rights applicable to those personal lines of insurance. Insurance Code §501.156 requires OPIC to submit to TDI for adoption a consumer bill of rights appropriate to each personal line of insurance that TDI regulates. These statutory requirements apply to all personal automobile and homeowner insurers, regardless of size. The requirements cannot be waived or modified for small or micro businesses. For these reasons, TDI rejected this option.

EXAMINATION OF COSTS UNDER GOVERNMENT CODE §2001.0045. TDI has determined that this proposal does impose a possible cost on regulated persons. However, no additional rule amendments are required under Government Code §2001.0045 because publishing amended the Auto Bill of Rights and Homeowner Bill of Rights is necessary to implement Insurance Code §501.156, in light of the legislative changes to §551.109 and §554.002 and the new §559.058 and Chapter 1813. Section 501.156 requires OPIC to submit for adoption a consumer bill of rights appropriate to each personal line of insurance TDI regulates, and it is necessary for TDI to amend §5.9970 and 5.9971 to apply the updated bills of rights.

GOVERNMENT GROWTH IMPACT STATEMENT.

TDI has determined that for each year of the first five years that the proposed amendments are in effect, the amendments:

-will not create or eliminate a government program;

-will not require the creation of new employee positions or the elimination of existing employee positions;

-will not require an increase or decrease in future legislative appropriations to the agency;

-will not require an increase or decrease in fees paid to the agency;

-will not create a new regulation;

-will not expand an existing regulation by adding new requirements an insurer must comply with;

-will not increase or decrease the number of individuals subject to the rule's applicability; and

-will not positively or adversely affect the Texas economy.

TAKINGS IMPACT ASSESSMENT. TDI has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action. As a result, this proposal does not constitute a taking or require a takings impact assessment under Government Code §2007.043.

REQUEST FOR PUBLIC COMMENT. TDI will consider any written comments for the proposal that are received by TDI no later than 5:00 p.m., central time, on June 15, 2026. Consistent with Government Code §2001.024(a)(8), TDI requests public comments on the proposal, including information related to the cost, benefit, or effect of the proposal and any applicable data, research, and analysis. Send your comments to ChiefClerk@tdi.texas.gov or by mail to the Office of the Chief Clerk, MC: GC-CCO, Texas Department of Insurance, P.O. Box 12030, Austin, Texas 78711-2030.

To request a public hearing on the proposal, submit a separate request before the end of the comment period to ChiefClerk@tdi.texas.gov or by mail to the Office of the Chief Clerk, MC: GC-CCO, Texas Department of Insurance, P.O. Box 12030, Austin, Texas 78711-2030. The request for public hearing must be separate from any comments and received by TDI no later than 5:00 p.m., central time, on June 15, 2026. If a public hearing is held, TDI will consider written and oral comments presented at the hearing.

STATUTORY AUTHORITY. TDI proposes amendments to §5.9970 and §5.9971 under Insurance Code §§501.156, 551.112, 559.004, 1813.002, and 36.001.

Insurance Code §501.156 requires OPIC to submit to TDI for adoption a consumer bill of rights appropriate to each personal line of insurance TDI regulates.

Insurance Code §551.112 authorizes the commissioner to adopt rules relating to the cancellation and nonrenewal of insurance policies.

Insurance Code §559.004 authorizes the commissioner to adopt rules necessary to implement Insurance Code Chapter 559.

Insurance Code §1813.002 directs the commissioner to adopt rules necessary to implement Insurance Code Chapter 1813.

Insurance Code §36.001 authorizes the commissioner to adopt any rules necessary and appropriate to implement the powers and duties of TDI under the Insurance Code and other laws of this state.

CROSS-REFERENCE TO STATUTE.

Section 5.9970 and §5.9971 implement Insurance Code Chapter 1813 and Insurance Code §§501.156, 544.002, 551.109, 559.058, and 36.001.

§ 5.9970. Personal Automobile Insurance Consumer Bill of Rights.

(a) For purposes of this section, "insurer" means an insurance company, reciprocal or interinsurance exchange, mutual insurance company, capital stock company, county mutual insurance company, Lloyd's plan, or other legal entity authorized to write personal automobile insurance in this state. The term includes an affiliate, as described by Insurance Code §823.003(a), if that affiliate is authorized to write and is writing personal automobile insurance in this state.

(b) The Texas Department of Insurance adopts the 2026 [ 2024 ] version of the Consumer Bill of Rights - Personal Automobile Insurance (Auto Bill of Rights), and the Spanish language translation, as developed and submitted by the Office of Public Insurance Counsel:

Figure 1: 28 TAC §5.9970(b)

[ Figure 1: 28 TAC §5.9970(b) ]

Figure 2: 28 TAC §5.9970(b)

[ Figure 2: 28 TAC §5.9970(b) ]

(c) All insurers writing personal automobile insurance policies must provide with each new policy of personal automobile insurance a copy of the 2026 [ 2024 ] version of the Auto Bill of Rights. At the consumer's request, the insurer may provide an electronic copy of the Auto Bill of Rights instead of a hard copy. The insurer must provide the Auto Bill of Rights with each renewal notice for personal automobile insurance unless the insurer has previously provided the policyholder with the 2026 [ 2024 ] version of the Auto Bill of Rights.

(d) The Auto Bill of Rights must appear in no less than 10-point type and be on separate pages with no other text on those pages.

(e) Insurers must provide the Spanish language version of the 2026 [ 2024 ] version of the Auto Bill of Rights to any consumer who requests it.

(f) Insurers must provide the applicable Auto Bill of Rights included in this section beginning November 1, 2026 [ November 1, 2024 ]. Before that date, insurers may provide the Auto Bill of Rights either as it currently is included in this section or as it was included in the section as the section was amended to be effective November 1, 2024 [ May 16, 2021 ].

§ 5.9971. Homeowners, Dwelling, and Renters Insurance Consumer Bill of Rights.

(a) For purposes of this section, "insurer" means an insurance company, reciprocal or interinsurance exchange, mutual insurance company, capital stock company, county mutual insurance company, Lloyd's plan, or other legal entity authorized to write residential property insurance in this state. The term includes an affiliate, as described by Insurance Code §823.003(a), if that affiliate is authorized to write and is writing residential property insurance in this state. The term does not include the Texas Windstorm Insurance Association or the Texas Fair Plan Association.

(b) The Texas Department of Insurance adopts the 2026 [ 2024 ] version of the Consumer Bill of Rights - Homeowners, Dwelling, and Renters Insurance (Homeowners of Rights), and the Spanish language translation, as developed and submitted by the Office of Public Insurance Counsel:

Figure 1: 28 TAC §5.9971(b)

[ Figure 1: 28 TAC §5.9971(b) ]

Figure 2: 28 TAC §5.9971(b)

[ Figure 2: 28 TAC §5.9971(b) ]

(c) All insurers writing homeowners, dwelling, or renters insurance must provide with each new policy of any such insurance a copy of the 2026 [ 2024 ] version of the Homeowners Bill of Rights. At the consumer's request, the insurer may provide an electronic copy of the Auto Bill of Rights instead of a hard copy. The insurer must provide the Homeowners Bill of Rights with each renewal notice for any such insurance unless the insurer has previously provided the policyholder with the 2026 [ 2024 ] version of the Homeowners Bill of Rights.

(d) The Homeowners Bill of Rights must appear in no less than 10-point type and be on separate pages with no other text on those pages.

(e) Insurers must provide the Spanish language version of the 2026 [ 2024 ] version of the Homeowners Bill of Rights to any consumer who requests it.

(f) Insurers must provide the applicable Homeowners Bill of Rights included in this section beginning November 1, 2026 [ November 1, 2024 ]. Before that date, insurers may provide the Auto Bill of Rights either as it currently is included in this section or as it was included in the section as the section was amended to be effective November 1, 2024 [ May 16, 2021 ].

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 1, 2026.

TRD-202601865

Jessica Barta

General Counsel

Texas Department of Insurance

Earliest possible date of adoption: June 14, 2026

For further information, please call: (512) 676-6555

CHAPTER 12. INDEPENDENT REVIEW ORGANIZATIONS

SUBCHAPTER G. INDEPENDENT REVIEW OF PREAUTHORIZATION EXEMPTIONS

The Texas Department of Insurance (TDI) proposes to amend 28 TAC §12.601, concerning review of preauthorization exemptions by independent review organizations (IROs). The amended section implements House Bill 3812, 89th Legislature, 2025. In a separate rulemaking published in this issue of the Texas Register , TDI proposes to amend related rules in 28 TAC §§19.1730 - 19.1733 to address other provisions related to preauthorization exemptions that are impacted by HB 3812.

EXPLANATION.

Amending §12.601 is necessary to implement HB 3812, which amended Insurance Code §4201.656(a) to specify that a physician or provider has a right to an independent review of a health plan's determination to deny a preauthorization exemption.

Descriptions of the section's proposed amendments follow.

Section 12.601.

Subsection (e) of §12.601 is amended to clarify that it applies with respect to a review of a rescission, and to update the reference to the title of §19.1733 consistent with proposed amendments to Chapter 19 included in this Texas Register issue.

New subsection (f) is added to address a review of a preauthorization exemption denial, consistent with proposed §19.1733(f), which permits an IRO, in some circumstances, to review a random sample. Section 12.601(f) specifies that if a denial of a preauthorization exemption is based on five or fewer adverse determinations that were not previously upheld by an IRO or external reviewer, the IRO must review all the adverse determinations to determine whether to uphold or overturn the denial. If a denial of a preauthorization exemption is based on more than five adverse determinations that were not previously upheld by an IRO or external reviewer, the IRO may select a random sample of at least five and no more than 20 adverse determinations to review. This proposed requirement aligns with the random sampling approach provided for rescission reviews in Insurance Code §4201.655 and helps ensure that IROs will be able to complete reviews within the timeframe provided in Insurance Code §4201.656(c). If the IRO determines that one or more of the adverse determinations reviewed met the applicable medical necessity criteria and should have been approved, the IRO must recalculate an adjusted approval rate. New Figure: 28 TAC §12.601(f) is included to provide guidance on calculating the adjusted approval rate as required in new subsection (f). Paragraphs (1) - (3) specify the methodology for calculating the adjusted approval rate. Current subsections (f) - (g) are redesignated as appropriate to reflect addition of new subsection (f).

New subsection (i) is added to clarify the meaning of the term "external reviewer," with reference to federal rules. Under federal law, most appeals of adverse determinations use the federal external review process, which may not involve an IRO as defined by Chapter 12.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Rachel Bowden, director of Regulatory Initiatives in the Life and Health Division, has determined that during each year of the first five years the proposed amendments are in effect, there will be no measurable fiscal impact on state and local governments as a result of enforcing or administering the amendments, other than that imposed by the statute. Ms. Bowden made this determination because the proposed amendments do not add to or decrease state revenues or expenditures, and because local governments are not involved in enforcing or complying with the proposed amendments.

Ms. Bowden does not anticipate any measurable effect on local employment or the local economy as a result of this proposal.

PUBLIC BENEFIT AND COST NOTE.

For each year of the first five years the proposed amendments are in effect, Ms. Bowden expects that the proposed amendments will have the public benefits of ensuring that TDI's rules conform to Insurance Code Chapter 4201, Subchapter N, and that IROs understand how to evaluate appeals of preauthorization exemption denials.

Ms. Bowden expects that the proposed amendments will not increase the cost of compliance with Insurance Code Chapter 4201 because the amendments do not impose requirements beyond those in the statute. Amended §12.601 requires IROs to review adverse determinations related to preauthorization exemptions, including exemption denials. The amendments give IROs flexibility to select a random sample for review if the denial is based on more than five adverse determinations. The amendments are necessary to conform to Insurance Code §4201.656(a) as amended by HB 3812. As a result, any costs an IRO may incur in updating procedures to address review of preauthorization exemption denials are not directly attributable to this rule proposal.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS.

TDI has determined that the proposed amendments will not have an adverse economic effect on small or micro businesses, or on rural communities. As a result, and in accordance with Government Code §2006.002(c), TDI is not required to prepare a regulatory flexibility analysis.

EXAMINATION OF COSTS UNDER GOVERNMENT CODE §2001.0045.

TDI has determined that this proposal does not impose a possible cost on regulated persons. However, even if the proposal did impose a cost on regulated persons, no additional rule amendments are required under Government Code §2001.0045 because the proposed amendments are necessary to implement legislation. The proposed rule implements Insurance Code §4201.656 as amended by HB 3812.

GOVERNMENT GROWTH IMPACT STATEMENT.

TDI has determined that for each year of the first five years that the proposed amendments are in effect, the proposed rule:

- will not create or eliminate a government program;

- will not require the creation of new employee positions or the elimination of existing employee positions;

- will not require an increase or decrease in future legislative appropriations to the agency;

- will not require an increase or decrease in fees paid to the agency;

- will not create a new regulation;

- will expand, limit, or repeal an existing regulation;

- will not increase or decrease the number of individuals subject to the rule's applicability; and

- will not positively or adversely affect the Texas economy.

TAKINGS IMPACT ASSESSMENT.

TDI has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action. As a result, this proposal does not constitute a taking or require a takings impact assessment under Government Code §2007.043.

REQUEST FOR PUBLIC COMMENT.

TDI will consider any written comments on the proposal that are received by TDI no later than 5:00 p.m., central time, on June 17, 2026. Consistent with Government Code §2001.024(a)(8), TDI requests public comments on the proposal, including information related to the cost, benefit, or effect of the proposal and any applicable data, research, and analysis. Send your comments to or to the Office of the Chief Clerk, MC: GC-CCO, Texas Department of Insurance, P.O. Box 12030, Austin, Texas 78711-2030.

The commissioner of insurance will also consider written and oral comments on the proposal in a public hearing under Docket No. 2866. This proposal will be part of a rule hearing docket that will begin at 1:00 p.m., central time, on June 15. TDI will hold the public hearing remotely using online resources and in person at the Barbara Jordan State Office Building, 1601 Congress Avenue, Austin, Texas 78701 in Room 2.029. Visit www.tdi.texas.gov/alert/event/index.html for more information on the proposed rule, hearing, and comment submission.

STATUTORY AUTHORITY.

TDI proposes amendments to §12.601 under Insurance Code §§4201.003, 4202.002 and 36.001.

Insurance Code §4201.003 authorizes the commissioner to adopt rules to implement Insurance Code Chapter 4201.

Insurance Code §4202.002 authorizes the commissioner to adopt standards and rules for the operation of independent review organizations.

Insurance Code §36.001 provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of TDI under the Insurance Code and other laws of this state.

CROSS-REFERENCE TO STATUTE.

Amendments to §12.601 implement Insurance Code §4201.656(a) as amended by HB 3812.

§ 12.601. Preauthorization Exemptions.

(a) In this section, the following words and terms have the following meanings unless context clearly indicates otherwise.

(1) Adverse determination regarding a preauthorization exemption--Has the same meaning as defined in §19.1730 of this title (relating to Definitions).

(2) Issuer--Has the same meaning as defined in §19.1730 of this title.

(3) Physician--Has the same meaning as defined by Insurance Code §843.002, concerning Definitions.

(4) Preauthorization exemption--Has the same meaning as defined in §19.1730 of this title.

(5) Provider--Has the same meaning as defined in Insurance Code §843.002.

(b) An independent review of an adverse determination regarding a preauthorization exemption, the independent review organization (IRO) that performs the review, and the appropriate issuer are subject to Insurance Code Chapter 4201, Subchapter N, concerning Exemption from Preauthorization Requirements for Physicians and Providers Providing Certain Health Care Services, and the associated standards and requirements in this chapter, except as otherwise specified in this section.

(c) For purposes of this section, a physician or provider should be identified using the National Provider Identifier under which a physician or provider makes preauthorization requests.

(d) Notwithstanding §12.501 of this title (relating to Requests for Independent Review), an issuer must submit a request for independent review of an adverse determination regarding a preauthorization exemption to the department on behalf of a physician or provider.

(e) For a review of a rescission of a preauthorization exemption, if [ If ] a second random sample is requested under Insurance Code §4201.656(d), concerning Independent Review of Exemption Determination, and available as provided in §19.1733(e) of this title (relating to Utilization [ Retrospective ] Reviews and Appeals of Preauthorization Exemption Denials and Rescissions), the IRO must identify, from the list of eligible claims provided by the issuer, a second random sample of at least five and no more than 20 claims. The IRO must review each claim that the issuer retrospectively reviewed and determined did not meet the applicable medical necessity criteria and, if applicable, each claim included in the second random sample identified by the IRO. Consistent with Insurance Code §4201.656(b), the IRO may request any medical records needed to evaluate the claims subject to review and must provide at least three business days for receipt of records. Based on the total number of claims in the initial random sample and, if applicable, the second random sample, the IRO must determine whether to affirm or overturn the issuer's determination that less than 90% [ 90 percent ] of the claims met the applicable medical necessity criteria.

(g) [ (f) ] Appeals for an adverse determination regarding a preauthorization exemption to an IRO follow the department's process for assigning IROs under §12.502 of this title (relating to Random Assignment), except that notification under §12.502(a) will only be made to the IRO, the issuer, and the physician or provider.

(h) [ (g) ] Section 12.206 of this title (relating to Notice of Determinations Made by Independent Review Organizations) does not apply to a review by an IRO under this section. An IRO must complete its review and provide timely notice to an issuer regarding its determination, consistent with the timeframe provided under Insurance Code §4201.656(c).

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 1, 2026.

TRD-202601867

Jessica Barta

General Counsel

Texas Department of Insurance

Earliest possible date of adoption: June 14, 2026

For further information, please call: (512) 676-6555

CHAPTER 19. LICENSING AND REGULATION OF INSURANCE PROFESSIONALS

The Texas Department of Insurance (TDI) proposes to amend 28 TAC:

- Section 19.1006 and §19.1028, concerning licensee continuing education courses and requirements for adjuster licensing, and annuity certification courses;

- Sections 19.1702, 19.1705, 19.1706, 19.1709, and 19.1710, concerning utilization review;

- Sections 19.1730 - 19.1733, concerning preauthorization exemptions;

- Sections 19.1801 and §19.1803, concerning prior authorization request forms; and

- Sections 19.2005, 19.2006, 19.2009, and 19.2010, concerning utilization review and utilization review agents under workers' compensation insurance coverage.

TDI also proposes new §19.1734, concerning preauthorization exemptions. The proposed amendments and new section implement House Bills 2221 and 3812, 89th Legislature, 2025, and Senate Bill 815, 89th Legislature, 2025. The proposed amendments also implement House Bill 4611, 88th Legislature, 2023; Senate Bill 1296, 84th Legislature, 2015; and Senate Bill 1216, 83rd Legislature, 2013.

EXPLANATION.

HB 2221 reorganized Insurance Code provisions related to rebating and unlawful inducements by repealing certain provisions in Insurance Code Chapter 541 and enacting similar provisions in new Insurance Code Chapter 1702. To conform to HB 2221, the proposal amends §19.1006 and §19.1028, which reference Insurance Code Chapter 541. The amendments revise provisions that reference Insurance Code Chapter 541 to also reference Insurance Code Chapter 1702.

SB 815 prohibits a utilization review agent (URA) from using an automated decision system to make an adverse determination. To implement this provision, the proposal amends §19.1705(d) and §19.2005(d) to reference new Insurance Code §4201.156. SB 815 also modifies the required contents of adverse determination notices. To implement these changes, the proposal amends §19.1709(c) and §19.2009(b) to conform to Insurance Code §4201.303.

SB 1216 created Insurance Code §1217.004(b), which requires issuers to exchange prior authorization requests electronically with a physician or provider who initiates a request electronically. This requirement applies "not later than the second anniversary of the date national standards for electronic prior authorization of benefits are adopted." Recent federal rules adopted 45 CFR §156.223, which requires qualified health plans to maintain electronic systems for prior authorization that meet federal standards. By establishing national electronic prior authorization standards and requiring commercial health plans to use those standards, the federal rules trigger the implementation of Insurance Code §1217.004(b). The proposal amends §19.1702 to reference Insurance Code Chapter 1217 and amends §19.1705 to add new subsection (g) to implement §1217.004 no later than January 1, 2027. This proposed date aligns with the deadline provided in the federal rules at 45 CFR §156.223.

HB 3812 amended Insurance Code §4201.152 to specify that a physician who directs utilization review may not hold a license to practice administrative medicine. To implement this provision, the proposal amends requirements related to URA personnel in §19.1706 (for health plans) and §19.2006 (for workers' compensation) to reference Insurance Code Chapter 4201.

HB 3812 also amended provisions in Insurance Code Chapter 4201, Subchapter N, related to preauthorization exemptions. To implement these changes, the proposal amends §§19.1730 - 19.1733. The amendments:

- add a definition for "affiliate" and revise the definitions of "adverse determination regarding a preauthorization exemption" and "evaluation";

- modify the definition of "evaluation period" by raising the period from six months to one year;

- require evaluations to include preauthorization requests submitted to either an issuer or its affiliate, and to include requests regardless of whether the request was made in connection with a plan subject to Insurance Code Chapter 4201, Subchapter N;

- clarify the requirements for review of fewer than five claims;

- update the evaluation time periods;

- add requirements addressing notice of a denial of a preauthorization exemption; and

- permit a physician or provider to appeal an exemption denial to an independent review organization (IRO).

Consistent with new Insurance Code §4201.660, the proposal adds new §19.1734 to specify data submission requirements for issuers to report annual data and provides that the reports are public information subject to disclosure under the Public Information Act, Government Code Chapter 552. In a separate rulemaking also published in this issue of the Texas Register , TDI proposes to amend 28 TAC §12.601 to address the independent review process related to denials of preauthorization exemptions.

HB 4611 reorganized Medicaid provisions in the Government Code by repealing Chapter 533 and adding new Chapter 540. To conform to these bills, the proposal amends §19.1801 and §19.1803 to remove outdated references to Government Code Chapter 533 and replace them with references to Government Code Chapter 540.

SB 1296 made nonsubstantive changes and corrections, including redesignating Insurance Code Chapter 1369, Subchapter F--as added by Senate Bill 644, 83rd Legislature, 2013--as Insurance Code Chapter 1369, Subchapter G. To conform to this change, the rule amends §19.1803(7) to correct a code reference.

Unrelated to specific legislation, the proposal also makes some minor changes to utilization review provisions. Screening criteria requirements in §19.1705 are amended to clarify that screening criteria must not be more restrictive than the Insurance Code's coverage standards. To increase transparency for recipients of adverse determination notices, the notice requirements in §19.1709 are amended to require inclusion of either the name or national provider identifier of the physician or provider who made the adverse determination. To address questions that have arisen from URAs, §19.1710 and §19.2010 are amended to clarify expectations when it is not feasible to provide a "reasonable opportunity" for the physician or provider to discuss the treatment plan before an adverse determination.

Descriptions of the proposed new and amended sections follow.

Subchapter K.

Section 19.1006.

An amendment to §19.1006 adds new subparagraph (D) to subsection (a)(8) regarding topics that are approved for continuing education courses for licensees. Subsequent subparagraphs are redesignated to reflect addition of the new subparagraph. This addition references Insurance Code Chapter 1702, which was added under HB 2221. HB 2221 also repealed Insurance Code §§541.056 - 541.058, and it created similar provisions within new Chapter 1702. The reference to Chapter 541 in current §19.1006(a)(8)(A) is retained, as there are other provisions in Chapter 541 that are not repealed and thus continue to apply. Subsection (a)(8)(E), as redesignated, is amended to correct the title of a statutory citation.

Section 19.1028.

An amendment to §19.1028 adds paragraph (3) to subsection (g) regarding subjects that must be included in an annuity certification course outline. This addition references Insurance Code Chapter 1702, which was added by HB 2221. The reference to Insurance Code §§541.051 - 541.061 in current §19.1028(g)(2) is retained, as there are some provisions that continue to apply. Existing paragraphs within subsection (g) that follow new paragraph (3) are redesignated to reflect addition of the new paragraph. Amendments to the section also change "shall" to "must" each place where the word appears in subsections (c) - (e); change "subchapter" to "title" in subsections (b), (c)(1), (d), and (f); and remove superfluous uses of the word "the" in subsection (g)(1), (2), and (5), for consistency with agency rule drafting style.

Subchapter R, Division 1.

Section 19.1702.

Subsection (b) of §19.1702 is amended to add a reference to Insurance Code Chapter 1217. This addition clarifies that Chapter 1217, regarding the standard request form for prior authorization of health care services, applies to Subchapter R. In addition, an amendment adds the title of Insurance Code Chapter 4201 to subsection (a), for consistency with agency rule drafting style.

Section 19.1705. Subsections (b) and (c) of §19.1705 are amended to add titles to the Insurance Code citations to conform to agency style and enhance readability.

Amendments to subsection (c) also specify that screening criteria must not be more restrictive than the coverage standards in Title 8, Subtitle E, of the Insurance Code. In recent years, legislation has added coverage standards that constrain or interact with health plan screening criteria. This change is necessary to remind utilization review agents that screening criteria must comply with Texas requirements.

To implement SB 815, subsection (d) is amended to reference new Insurance Code §4201.156. Current subsection (d) requires a referral to a physician or other health care provider with appropriate credentials to make adverse determinations. The added reference clarifies that these determinations must be consistent with the prohibition in §4201.156, effective January 1, 2026, against using automated decision systems to make an adverse determination.

Subsection (g) is added to implement Insurance Code §1217.004, as added by SB 1216. It requires an issuer to maintain an electronic prior authorization system that meets national standards, no later than January 1, 2027. The Insurance Code requires plans to make electronic prior authorization available "not later than the second anniversary of the date national standards for electronic prior authorization of benefits are adopted." In February 2024, the Centers for Medicare and Medicaid Services (CMS) adopted 45 CFR §156.223, requiring qualified health plans to use application programming interfaces (APIs) to make various types of information and transactions available electronically, including a "HIPAA-compliant prior authorization request and response." The federal rule applies for plan years beginning on or after January 1, 2027. While a corresponding requirement exists for prior authorization of prescription drug benefits in Insurance Code §1369.304, TDI is not implementing that requirement at this time, because the federal rule at 45 CFR §156.223 currently excludes prescription drugs. TDI will monitor future federal rulemaking related to electronic prior authorization standards, including 91 FR 19890, and will consider broadening subsection (g) at adoption to implement Insurance Code §1369.304, if appropriate.

Section 19.1706.

To implement the personnel provisions in HB 3812 and other legislation that has specified physician licensure requirements, subsection (a) is amended to reference Insurance Code Chapter 4201, and new subsection (f) is added to require utilization review to be conducted under the direction of a licensed physician, consistent with Insurance Code §4201.152, which requires that the physician does not hold a license to practice administrative medicine. This aligns with a corresponding provision in §19.2006. Nonsubstantive amendments are made in subsections (a)(1) and (e) to correct legal citations and add title references to conform to agency style.

Section 19.1709.

To implement SB 815, the elements required in an adverse determination notice under subsection (c)(3) are amended to align with Insurance Code §4201.303(a), which requires both a description and the source of the screening criteria and review procedures used in the determination. To increase transparency to recipients of adverse determination notices, subsection (c)(4) is amended to require URAs to include either the name or the National Provider Identifier of the physician, doctor, or other health care provider that made the adverse determination.

Nonsubstantive amendments are made in subsections (b), (e), and (f) to add titles to Insurance Code references to conform to agency style, change "C.F.R." to "CFR" in subsection (e)(2), and to make "time frame" or "time frames" one word in subsections (e)(3), (e)(4), and (f)(1).

Section 19.1710.

The existing provisions in §19.1710 are designated as subsection (a). Also, to reflect plain language and align with the definition of "reasonable opportunity" in §19.1703, the phrase "prior to the issuance of" is replaced with "before issuing."

New subsection (b) is added to clarify a URA's responsibility when the timeframe for issuing a determination prevents the opportunity from satisfying the "reasonable opportunity" definition in §19.1703. A reasonable opportunity is defined as one working day (during normal business hours). However, under Insurance Code §§843.348, 1301.135, and 4201.304, there are some circumstances when the timeframe for issuing an adverse determination may be shorter--such as 24 hours for an individual who is an inpatient in a facility or one hour for poststabilization care after emergency treatment. New subsection (b) clarifies that a URA must act in good faith to provide a reasonable opportunity for a peer-to-peer discussion before issuing an adverse determination. However, if there are fewer than 12 hours available during normal business hours between the time a request is received and the time a determination must be issued, the URA must issue the determination within the required timeframe.

Subchapter R, Division 2.

Section 19.1730.

The proposed amendments add the defined term "affiliate" to align with Insurance Code §4201.651, renumber subsequent definitions to reflect addition of the new defined term, renumber internal paragraph references to reflect the renumbered definitions, and amend certain definitions to conform to changes made by HB 3812.

The definition of "adverse determination regarding a preauthorization exemption" is amended to broaden the term to include adverse determinations in connection with a denial of a preauthorization exemption, in addition to a rescission. The definition of "eligible preauthorization request" is amended to include preauthorization requests submitted to an issuer or an affiliate of the issuer, regardless of whether the request was made in connection with a policy or plan subject to Insurance Code Chapter 4201, Subchapter N. The definition of "evaluation" is amended to reference the evaluation threshold of five eligible preauthorization requests and specify that all preauthorization requests submitted to the issuer or its affiliate must be included. The definition of "evaluation period" is amended to permit an issuer to determine the evaluation period for a determination issued on or after September 1, 2025, as long as the end of the evaluation period is not more than 12 months from the last day of the previous evaluation period. References to a six-month evaluation period are updated to a 12-month period.

To simplify the contents of the definition, the requirement limiting the amount of time between the evaluation period ending and the provision of the notice is removed from §19.1730(6)(C) and a similar provision is added to §19.1732(d). Conforming changes are made to paragraph cross-reference citations to reflect this change.

Section 19.1731.

Subsection (b) of §19.1731 is amended to clarify that the evaluation requirement applies to all eligible preauthorization requests submitted to the issuer or its affiliate. References to when requests are finalized are removed to avoid duplication with the definition of "eligible preauthorization request." Subsection (c) is amended to clarify the number of claims that must be reviewed to rescind an exemption, depending on whether there are at least five claims available for review. A conforming change is made to a cross-reference citation to reflect the renumbering of definitions in §19.1730.

Section 19.1732.

Subsection (a) of §19.1732 is amended to remove the requirement for an exemption to be in place at least six months, since HB 3812 provides a longer timeframe.

Subsection (b) is amended to require denial and rescission notices to comply with §19.1732 and specify that sample forms are available on TDI's website at www.tdi.texas.gov/forms. Language in subsection (b) concerning denial notice requirements is removed because more detailed requirements are proposed in new subsection (e).

Subsection (c) is amended to remove the initial evaluation period and notice deadline, which has now passed, and to update a cross-reference citation to reflect the renumbering of definitions in §19.1730.

Subsection (d) is amended to require that a notice of rescission be provided no later than three months following the day after the end of the evaluation period. This provision replaces the two-month-notice requirement previously contained in §19.1730(6)(C), as redesignated. Since HB 3812 modified Insurance Code §4201.655(a)(1) to allow a rescission to occur only in January (instead of January or June), this additional month will give issuers more time to evaluate and process proposed rescissions. Subsection (d) is also amended to remove the reference to a sample form, which is now provided in subsection (b), and to remove a duplicative issue date requirement from paragraph (2). To correct grammar and readability, a nonsubstantive change is made to subsection (d)(3)(C). In addition, a reference to the title of Insurance Code §4201.655 is added to the subsection.

Current subsection (e) is redesignated as subsection (f), and new subsection (e) is added to specify the requirements for notifying a physician or provider that their request for a preauthorization exemption is denied. The new notice requirements, which include information about the preauthorization requests that were evaluated and how to request an independent review of the denial, are consistent with Insurance Code §4201.656(a), as amended by HB 3812.

Section 19.1733.

The title of §19.1733 is amended to conform with HB 3812 by replacing "retrospective" with "utilization" and adding a reference to denials of preauthorization exemptions.

Subsection (b) is amended to update a cross-reference citation to reflect the renumbering of definitions in §19.1730.

Subsection (c) is amended to clarify that the subsection applies when a physician or provider receives a notice of rescission or denial and clarifies the deadlines for a physician or provider to request an independent review of a denial or a rescission of a preauthorization exemption.

Subsection (d) is amended to broadly reference "an adverse determination regarding a preauthorization exemption," thereby including both rescissions and denials, and to expand a reference to a rescission to add "or denial," to align with Insurance Code §4201.656(a) as amended by HB 3812. A reference to §19.1732 is corrected to remove a reference to subsection (c), since the forms to request an independent review are addressed in subsections (b), (d), and (e). In the context of a denial of a preauthorization exemption, the physician or provider would have already had the opportunity to appeal to an IRO for each adverse determination included in the evaluation. Subsection (d) is also amended to clarify that an adverse determination that was previously appealed to and upheld by an IRO is not eligible for a subsequent independent review. To conform to agency style, subsection (d) is amended to add the title of an Insurance Code citation.

New subsection (f) is added to explain the scope of the IRO's review for a denial of a preauthorization exemption, with reference to 28 TAC §12.601(f). Section 12.601(f) is a new provision proposed in a separate rulemaking, also published in this issue of the Texas Register , that permits an IRO, in some circumstances, to review a random sample of adverse determinations to determine whether a denial of a preauthorization exemption should be overturned. To ensure that it is feasible for an IRO to meet the deadline provided in Insurance Code §4201.656(c), subsection (f) permits an IRO to review a random sample of at least five but not more than 20 adverse determinations. Subsection (f) also clarifies that an IRO's determination of an adverse determination reviewed in connection with a preauthorization denial does not impact the status of the original preauthorization request. TDI also proposes to amend §12.601 to provide additional detail regarding how IRO determinations related to denials must be calculated. Current subsection (f) and subsequent subsections are redesignated to reflect the addition of new subsection (f).

Section 19.1734.

New §19.1734 is added to specify reporting requirements, consistent with Insurance Code §4201.660, as added by HB 3812. Subsection (a) specifies an annual due date of March 1, and a requirement to use the form on TDI's website. Subsection (b) specifies the contents of the report, including the issuer's name, National Association of Insurance Commissioners (NAIC) number, and contact information; name and NAIC number of each affiliate of the issuer; the number of lives covered by the issuer and each affiliate within each line of business; the number of particular health care services requiring preauthorization; the number of in-network physicians and providers; and the number of in-network physicians and providers receiving at least one preauthorization exemption.

Data on the number of preauthorization requests under each line of business will provide context for policymakers on the volume of data being added by inclusion of affiliates and lines of business that are not subject to Insurance Code Chapter 4201, Subchapter N. Data must be reported for each line of business in which the issuer or affiliate offers health coverage that includes a preauthorization requirement.

Lines of business include insurance products subject to Insurance Code Chapter 4201, Subchapter N, including major medical and vision; HMO products subject to Insurance Code Chapter 4201, Subchapter N, including major medical, vision, and dental; insurance and HMO products not subject to Insurance Code Chapter 4201, Subchapter N, including major medical, vision, and dental; Medicaid managed care; the Children's Health Insurance Program (CHIP); Medicare Advantage; and administrative services only, including services in connection with major medical, vision, and dental.

Paragraph (6) of subsection (b) specifies the data that must be submitted concerning exemptions for each particular health care service, including the number of new evaluations conducted and how many were granted versus denied; the number of exemptions in place that were previously granted, how many were evaluated, and how many were rescinded; and the number of appeals that were requested for denials or rescissions, and how many denials and rescissions were upheld or overturned on appeal.

Subchapter S.

Section 19.1801. To implement HB 4611, which reorganized Medicaid provisions in the Government Code, §19.1801 is amended to remove the outdated reference to Government Code Chapter 533. The section is amended to simply reference Insurance Code Chapter 1217 and Chapter 1369, Subchapter G, rather than restating the statutory applicability provisions.

Section 19.1803. Paragraph (6)(B)(iii) of §19.1803 is amended to reference Government Code Chapter 540, instead of Chapter 533, which was repealed and replaced by HB 4611. Paragraph (7) is amended to replace a reference to Insurance Code §1369.252 with a reference to Insurance Code §1369.302 because the section was redesignated in 2015 by SB 1296. To conform to agency style, paragraphs (6) - (8) are amended to add titles to statutory citations.

Subchapter U.

Section 19.2005. To implement SB 815, subsection (d) is amended to reference new Insurance Code §4201.156. Nonsubstantive amendments are made in subsections (c) - (e) to add titles to statutory citations to conform to agency style.

Section 19.2006. To implement the personnel provisions in HB 3812 and other legislation that has specified physician licensure requirements, subsection (a) is amended to reference Insurance Code Chapter 4201. Nonsubstantive amendments to subsection (a) are made to add or correct titles to statutory citations to conform to agency style and to correct an outdated rule citation.

Subsection (e) is amended to add a reference to Insurance Code §4201.152.

Section 19.2009. To implement SB 815, the elements required in an adverse determination notice under subsection (b)(7) and (8) are amended to align with Insurance Code §4201.303(a), which requires both a description of and the source of the screening criteria and review procedures used in the determination. To conform to agency style, a nonsubstantive amendment was made to a federal code citation in subsection (a)(4) and a title was added to a code reference in subsection (b)(8).

Section 19.2010. The existing provisions in §19.2010 are designated as subsection (a). To reflect plain language and align with the definition of "reasonable opportunity" in §19.2003, the phrase "prior to the issuance of" is replaced with "before issuing."

New subsection (b) is added to clarify a URA's responsibility when the timeframe for issuing a determination prevents the opportunity from satisfying the "reasonable opportunity" definition in §19.2003. A reasonable opportunity is defined as one working day (during normal business hours). However, under Insurance Code §4201.304, there are some circumstances when the timeframe for issuing an adverse determination may be shorter, such as one hour for poststabilization care after emergency treatment. New subsection (b) clarifies that a URA must act in good faith to provide a reasonable opportunity for a peer-to-peer discussion before issuing an adverse determination. However, if there are fewer than 12 hours available during normal business hours between the time a request is received and the time a determination must be issued, the URA must issue the determination within the required timeframe.

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT.

Rachel Bowden, director of Regulatory Initiatives in the Life and Health Division, has determined that during each year of the first five years the sections as proposed are in effect, there will be no measurable fiscal impact on state and local governments as a result of enforcing or administering them, other than that imposed by statute. Ms. Bowden made this determination because the sections as proposed do not add to or decrease state revenues or expenditures and because local and state government entities are only involved in enforcing or complying with the proposed amendments when acting in the capacity of a workers' compensation insurance carrier. Those entities will be affected in the same way as an insurance carrier and will realize the same benefits from the proposed amendments.

Ms. Bowden does not anticipate any measurable effect on local employment or the local economy as a result of this proposal.

PUBLIC BENEFIT AND COST NOTE.

For each year of the first five years the sections as proposed are in effect, Ms. Bowden expects that administering and enforcing them will have the public benefits of ensuring that TDI's rules conform to Insurance Code Chapters 1217 and 4201 and do not reference repealed statutes. The proposed amendments will also have the benefit of ensuring that screening criteria used for utilization review is no less restrictive than the coverage standards addressed in Insurance Code Title 8, Subtitle E.

Ms. Bowden expects that the sections as proposed will not increase the cost of compliance with Insurance Code Chapters 1217 or 4201 because the amendments do not impose requirements beyond those in statute. Health benefit plans are required to process electronic prior authorization requests under Insurance Code Chapter 1217 and grant preauthorization exemptions and report data under Insurance Code Chapter 4201, Subchapter N. Under Insurance Code §4201.152, utilization review must be conducted under the direction of a physician licensed to practice medicine in Texas. The physician may not hold a license to practice administrative medicine. Utilization review agents are also required to update adverse determination notices to comply with SB 815. As a result, the cost associated with developing electronic prior authorization systems, updating evaluation processes and reporting data for preauthorization exemptions, hiring utilization review directors without administrative medical licenses, and updating adverse determination notices does not result from enforcement or administration of the sections as proposed.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS.

TDI has determined that the sections as proposed will not have an adverse economic effect on small or micro businesses, or on rural communities. As a result, and in accordance with Government Code §2006.002(c), TDI is not required to prepare a regulatory flexibility analysis.

EXAMINATION OF COSTS UNDER GOVERNMENT CODE §2001.0045.

TDI has determined that this proposal does not impose a possible cost on regulated persons. However, even if the proposal did impose a cost on regulated persons, no additional rule amendments are required under Government Code §2001.0045 because the sections as proposed are necessary to implement legislation. The proposed rule implements Insurance Code Chapter 1702 and §§4201.002, 4201.152, 4201.156, 4201.303, 4201.651, 4201.653, 4201.655, 4201.656, 4201.658, 4201.659, and 4201.660, as added or amended by HB 2221, HB 3812, and SB 815, and Insurance Code §1217.004, as added by SB 1216.

GOVERNMENT GROWTH IMPACT STATEMENT.

TDI has determined that for each year of the first five years that the sections as proposed are in effect, the proposed rule:

- will not create or eliminate a government program;

- will not require the creation of new employee positions or the elimination of existing employee positions;

- will not require an increase or decrease in future legislative appropriations to the agency;

- will not require an increase or decrease in fees paid to the agency;

- will create a new regulation;

- will expand, limit, or repeal an existing regulation;

- will not increase or decrease the number of individuals subject to the rule's applicability; and

- will not positively or adversely affect the Texas economy.

TAKINGS IMPACT ASSESSMENT.

TDI has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action. As a result, this proposal does not constitute a taking or require a takings impact assessment under Government Code §2007.043.

REQUEST FOR PUBLIC COMMENT.

TDI will consider any written comments on the proposal that are received by TDI no later than 5:00 p.m., central time, on June 17, 2026. Consistent with Government Code §2001.0024(a)(8), TDI requests public comments on the proposal, including information related to the cost, benefit, or effect of the proposal and any applicable data, research, and analysis. Send your comments to ChiefClerk@tdi.texas.gov or to the Office of the Chief Clerk, MC: GC-CCO, Texas Department of Insurance, P.O. Box 12030, Austin, Texas 78711-2030.

The commissioner of insurance will also consider written and oral comments on the proposal in a public hearing under Docket No. 2866. This proposal will be part of a rule hearing docket that will begin at 1:00 p.m., central time, on June 15, 2026. TDI will hold the public hearing remotely using online resources and in person at the Barbara Jordan State Office Building, 1601 Congress Avenue, Austin, Texas 78701 in Room 2.029. Visit www.tdi.texas.gov/alert/event/index.html for more information on the proposed rule, hearing, and comment submission.

SUBCHAPTER K. CONTINUING EDUCATION, ADJUSTER PRELICENSING EDUCATION PROGRAMS, AND CERTIFICATION COURSES

STATUTORY AUTHORITY.

TDI proposes amendments to §19.1006 and §19.1028 under Insurance Code §§4004.103, 4004.104, 4004.203, and 36.001.

Insurance Code §4004.103 provides that the commissioner may adopt rules establishing other requirements for continuing education program providers.

Insurance Code §4004.104 authorizes TDI to establish the scope and type of continuing education requirements for each type of licensee.

Insurance Code §4004.203 provides that the commissioner by rule adopt criteria for continuing education programs used to satisfy the requirements of Insurance Code §4004.202.

Insurance Code §36.001 provides that the commissioner may adopt any rules necessary and appropriate to implement TDI's powers and duties under the Insurance Code and other laws of this state.

CROSS-REFERENCE TO STATUTE.

Amendments to §19.1006 and §19.1028 implement Insurance Code Chapters 1702 and 4004, and HB 2221.

§ 19.1006. Course Criteria.

(a) To be certified as a continuing education course, the course content must include topics that contribute substantive knowledge relating to the business of insurance and expand the competence of the licensee. Ethics and consumer protection course credit, described in paragraph (8) of this subsection, applies equally to all license types. TDI will not approve a course if it does not relate specifically to the business of insurance. Given that restriction, approved topics include, but are not limited to, the following:

(1) actuarial mathematics, statistics, and probability;

(2) assigned risk;

(3) claims adjusting;

(4) courses leading to and maintaining insurance designations;

(5) employee benefit plans;

(6) errors and omissions;

(7) estate planning/taxation;

(8) ethics and consumer protection, only if the course also provides instruction consistent with one or more of the following topics:

(A) Insurance Code Chapter 541, concerning Unfair Methods of Competition and Unfair or Deceptive Acts or Practices;

(B) Insurance Code Chapter 547, concerning False Advertising by Unauthorized Insurers;

(C) Insurance Code Chapter 542, Subchapter A, concerning Unfair Claim Settlement Practices;

(E) [ (D) ] Business and Commerce Code Chapter 17, Subchapter E,

concerning Deceptive Trade Practices and Consumer Protection [ Act ];

(F) [ (E) ] analogous laws as specified by TDI, including:

(i) Insurance Code Chapter 1952, Subchapter G, concerning Repair of Motor Vehicles;

(ii) Insurance Code Chapter 542, Subchapter B, concerning Prompt Payment of Claims;

(iii) Insurance Code Chapter 542, Subchapter D, concerning Notice of Settlement of Claim Under Casualty Insurance Policy;

(iv) Insurance Code Chapter 542, Subchapter E, concerning Recovery of Deductible From Third Parties Under Certain Automobile Insurance Policies;

(v) §5.501 of this title (relating to Notice Requirements to Claimants Regarding Motor Vehicle Repairs); and

(vi) Penal Code Chapter 35, concerning Insurance Fraud;

(G) [ (F) ] corporate ethics;

(H) [ (G) ] ethical challenges of licensees;

(I) [ (H) ] ethical behavior of an insurance company;

(J) [ (I) ] ethical behavior of an agent or adjuster;

(K) [ (J) ] duties of the licensee to company, client, and customer;

(L) [ (K) ] duties of insurer/HMO to agents/clients;

(M) [ (L) ] fiduciary responsibility;

(N) [ (M) ] unfair marketing practices;

(O) [ (N) ] difference between ethics and laws;

(P) [ (O) ] confidentiality, privacy, and ethics;

(Q) [ (P) ] ethical analysis of the licensee's job;

(R) [ (Q) ] philosophical approaches to ethics; or

(S) [ (R) ] business ethics;

(9) fundamentals/principles of insurance;

(10) insurance accounting/actuarial considerations;

(11) insurance contract/policy comparison and analysis;

(12) insurance fraud;

(13) insurance laws, rules, regulations, and regulatory updates;

(14) insurance policy provisions;

(15) insurance product-specific knowledge;

(16) insurance rating/underwriting/claims;

(17) insurance tax laws;

(18) legal principles;

(19) long-term care/partnership;

(20) loss prevention, control, and mitigation;

(21) managed care;

(22) principles of risk management;

(23) proper uses of insurance products;

(24) Real Estate Settlement Procedures Act;

(25) restoration--addresses claims, loss control issues, and mitigation;

(26) retirement planning;

(27) securities;

(28) suitability in insurance products;

(29) surety bail bond;

(30) underwriting principles; and

(31) viaticals/life settlements.

(b) To be certified as an adjuster prelicensing education course or program, the course content must enhance the student's knowledge, understanding, and/or professional competence regarding the subjects set forth in §19.1017 and §19.1018 of this title (relating to Adjuster Prelicensing Education Course Content and Examination Requirements and Adjuster Prelicensing Examination Topics). Unless specifically stated otherwise, this subchapter applies equally to courses certified for continuing education and adjuster prelicensing purposes.

(c) To be certified as a long-term care partnership certification course, the course content must enhance the student's knowledge, understanding, and professional competence regarding the subjects specified in §19.1022 of this title (relating to Long-Term Care Partnership Certification Course). Unless specifically stated otherwise, this subchapter applies equally to courses certified for continuing education and long-term care partnership certification and long-term care partnership continuing education purposes.

(d) To be certified as a Medicare-related product certification course, the course content must enhance the student's knowledge, understanding, and professional competence regarding the subjects specified in §19.1024 of this title (relating to Medicare-Related Product Certification Course). Unless specifically stated otherwise, this subchapter applies equally to courses certified for continuing education, Medicare-related product certification, and Medicare-related product continuing education purposes.

(e) To be certified as a small employer health benefit plan specialty certification course, the course content must enhance the student's knowledge, understanding, and professional competence regarding the subjects specified in §19.1026 of this title (relating to Small Employer Health Benefit Plan Specialty Certification Course). Unless specifically stated otherwise, this subchapter applies equally to courses certified for continuing education and small employer health benefit plan specialty certification.

(f) To be certified as an annuity certification or continuing education course, the course content must enhance the student's knowledge, understanding, and professional competence regarding the subjects specified in §19.1028(g)(1) - (4) of this title (relating to Annuity Certification Course). Unless specifically stated otherwise, this section applies equally to courses certified for continuing education and annuity certification.

(g) The following course content is not applicable to a licensee's continuing education requirements:

(1) meetings held in conjunction with the regular business of the licensee or courses or training relating to the marketing and business practices of a specific company;

(2) course content teaching general accounting, speed reading, other general business skills, computer use, or computer software application use;

(3) course content teaching motivation, goal-setting, time management, communication, sales, or marketing skills;

(4) course content providing for prelicensing training qualifying examination preparation;

(5) course content that does not meet the requirement of subsection (a) of this section; and

(6) course content that is substantially:

(A) a glossary, dictionary, or index of insurance terms without independent distinction as to the application of these terms to the business of insurance through case studies or analysis based on actual or hypothetical factual situations that apply to the business of insurance; or

(B) a recitation of statutes, rules, legal principles, or theories without independent distinction as to the application of these issues to the business of insurance through case studies or analysis based on actual or hypothetical factual situations that apply to the business of insurance.

(h) A single continuing education course may include both ethics and consumer protection credit topics with other topics meeting the requirements of subsection (a) of this section.

§ 19.1028. Annuity Certification Course.

(a) An individual who obtains a current resident agent license issued by the department on or after April 1, 2010, or renews a resident agent license on or after April 1, 2010, may not sell, solicit, or negotiate a contract for an annuity or represent an insurer in relation to an annuity in this state until they have completed the annuity certification course as specified in this section.

(b) Licensees that may qualify for the exemption provided under §19.1004(b) or (c) of this title [ subchapter ] (relating to Licensee Exemption from and Extension of Time for Continuing Education) are not exempt from the provisions of this section.

(c) This subsection establishes the standards for an annuity certification course. The course must [ shall ]:

(1) be submitted to the department for approval in compliance with §19.1007 of this title [ subchapter ] (relating to Course Certification Submission Applications, Course Expirations, and Resubmissions);

(2) be at least four hours in length; and

(3) cover each of the subjects described in subsection (g) of this section.

(d) Licensees may count an annuity certification course toward completion of the continuing education requirements prescribed in §19.1003 of this title [ subchapter ] (relating to Licensee Requirements). If a licensee chooses to use an annuity certification course to satisfy a portion of the continuing education requirements prescribed in §19.1003 of this title [ subchapter ], the licensee must [ shall ] comply with §19.1013 of this title [ subchapter ] (relating to Licensee Record Maintenance).

(e) A licensee must [ shall ] maintain proof of completion of an annuity certification course for a period of four years from the date of completion of the course. Upon request, the licensee must [ shall ] provide proof of completion of the annuity certification course to the department.

(f) A provider issued completion certificate for an annuity certification course must comply with the requirements of §19.1011 of this title [ subchapter ] (relating to Requirements for Successful Completion of Continuing Education Courses).

(g) Course subjects for an annuity certification course outline must include each of the following topics:

(1) the requirements of [ the ] Insurance Code Chapters 1114 and 1115, and the requirements of Chapter 3, Subchapter NN of this title (relating to Consumer Notices for Life Insurance Policy and Annuity Contract Replacements);

(2) the prohibitions specified in [ the ] Insurance Code §§541.051 - 541.061;

(4) [ (3) ] recognition of indicators that a prospective insured may lack the short-term memory or judgment to knowingly purchase an annuity; and

(5) [ (4) ] practices relating to annuities that are prohibited by [ the ] Penal Code Chapter 35.

(h) Course subjects for an annuity certification course outline may include additional topics addressing statutes enacted and rules adopted subsequent to the effective date of this section, provided that the statutes or rules relate specifically to annuities.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 1, 2026.

TRD-202601869

Jessica Barta

General Counsel

Texas Department of Insurance

Earliest possible date of adoption: June 14, 2026

For further information, please call: (512) 676-6555

SUBCHAPTER R. UTILIZATION REVIEWS FOR HEALTH CARE PROVIDED UNDER A HEALTH BENEFIT PLAN OR HEALTH INSURANCE POLICY

SUBCHAPTER S. FORMS TO REQUEST PRIOR AUTHORIZATION

SUBCHAPTER U. UTILIZATION REVIEWS FOR HEALTH CARE PROVIDED UNDER WORKERS' COMPENSATION INSURANCE COVERAGE

STATUTORY AUTHORITY.

TDI proposes amendments to §§19.2005, 19.2006, 19.2009, and 19.2010 under Insurance Code §4201.003 and §36.001.

Insurance Code §4201.003 authorizes the commissioner to adopt rules to implement Insurance Code Chapter 4201.

Insurance Code §36.001 provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of TDI under the Insurance Code and other laws of this state.

CROSS-REFERENCE TO STATUTE.

Proposed amendments to §19.2005(d) implement new Insurance Code §4201.156. Proposed amendments to §19.2009(b) conform to Insurance Code §4201.303. These amendments implement SB 815.

Proposed amendments to §19.2006(e) implement Insurance Code §4201.152 as amended by HB 3812.

§19.2005. General Standards of Utilization Review.

(a) Review of utilization review plan. A utilization review plan must be reviewed and approved by a physician and conducted under standards developed and periodically updated with input from both primary and specialty physicians, doctors, and other health care providers, including practicing health care providers, as appropriate.

(b) Special circumstances. A utilization review determination must be made in a manner that takes special circumstances of the case into account that may require deviation from the norm stated in the screening criteria or relevant guidelines. Special circumstances include, but are not limited to, an individual who has a disability, acute condition, or life-threatening illness. For the purposes of this section, disability must not be construed to mean an injured employee who is off work or receiving income benefits.

(c) Screening criteria. Each URA must utilize written screening criteria that are evidence-based, scientifically valid, outcome-focused, and that comply with the requirements in Insurance Code §4201.153, concerning Screening Criteria and Review Procedures. The screening criteria must also recognize that if evidence-based medicine is not available for a particular health care service provided, the URA must utilize generally accepted standards of medical practice recognized in the medical community. For workers' compensation network coverage, screening criteria must comply with Insurance Code Chapter 1305, concerning Workers' Compensation Health Care Networks, and §10.101 of this title (relating to General Standards for Utilization Review and Retrospective Review); for workers' compensation non-network coverage and workers' compensation health plan, screening criteria must comply with Labor Code §§401.011, concerning General Definitions; 413.011, concerning Reimbursement Policies and Guidelines; Treatment Guidelines and Protocols; and 413.014, concerning Preauthorization Requirements; Concurrent Review and Certification of Health Care; and Chapters 133, 134, and 137 of this title (relating to General Medical Provisions; Benefits-Guidelines for Medical Services, Charges, and Payments; and Disability Management, respectively).

(d) Referral and determination of adverse determinations. Consistent with Insurance Code §4201.156, concerning Use of Automated Decision System for Adverse Determinations, adverse [Adverse] determinations must be referred to and may only be determined by a physician, doctor, or other health care provider with appropriate credentials under Chapter 180 of this title (relating to Monitoring and Enforcement) and §19.2006 of this title (relating to Requirements and Prohibitions Relating to Personnel). Physicians and doctors performing utilization review must also comply with Labor Code §§408.0043, concerning Professional Specialty Certification Required for Certain Review, 408.0044, concerning Review of Dental Services, and 408.0045, concerning Review of Chiropractic Services.

(e) Delegation of review. A URA, including a specialty URA, may delegate the utilization review to qualified personnel in a hospital or other health care facility in which the health care services to be reviewed were, or are, to be provided. The delegation does not relieve the URA of full responsibility for compliance with this subchapter, Insurance Code Chapter 4201, concerning Utilization Review Agents, the Texas Workers' Compensation Act, and applicable TDI-DWC rules, including responsibility for the conduct of those to whom utilization review has been delegated.

(f) Complaint system. The URA must develop and implement procedures for the resolution of oral or written complaints initiated by injured employees, their representatives, or health care providers concerning the utilization review. The URA must maintain records of complaints for three years from the date the complaints are filed. The complaints procedure must include a requirement for a written response to the complainant by the agent within 30 calendar days. The written response must include TDI's address, toll-free telephone number, and a statement explaining that a complainant is entitled to file a complaint with TDI.

(g) Compliance with Labor Code §504.055. Utilization review plan written policies must evidence compliance with Labor Code §504.055, concerning Expedited Provision of Medical Benefits for Certain Injuries Sustained by First Responder in Course and Scope of Employment.

§19.2006. Requirements and Prohibitions Relating to Personnel.

(a) Qualification requirements. Physicians, doctors, and other health care providers employed by or under contract with a URA to perform utilization review must be appropriately trained, qualified, and currently licensed consistent with Insurance Code Chapter 4201, concerning Utilization Review Agents. Personnel conducting utilization review must hold an unrestricted license or an administrative license in Texas or be otherwise authorized to provide health care services in Texas. Physicians and doctors conducting utilization review must hold a professional certification in a health care specialty appropriate to the type of health care the injured employee is receiving as required by Labor Code §§408.0043, concerning Professional Specialty Certification, 408.0044, concerning Review of Dental Services, and 408.0045, concerning Review of Chiropractic Services. Physicians, doctors, and other health care providers conducting utilization review must have the appropriate credentials as required by Chapter 180 of this title (relating to Monitoring and Enforcement).

(1) This subchapter does not supersede requirements in the Medical Practice Act, Texas Medical Board rules, Texas Occupations Code Chapter 201, concerning Chiropractors [(relating to Chiropractors)], or Texas Board of Chiropractic Examiners rules. Individuals licensed by the Texas Medical Board are subject to 22 TAC Chapter 180 (relating to Disciplinary Guidelines) [190, regarding disciplinary guidelines].

(2) Personnel who perform clerical or administrative tasks are not required to have the qualifications prescribed by this subsection.

(b) Disqualifying associations. For purposes of this subsection, being employed by or under contract with the same URA as the physician, doctor, or other health care provider who issued the initial adverse determination does not in itself constitute a disqualifying association. A physician, doctor, or other health care provider who conducts utilization review must not have any disqualifying associations with the:

(1) injured employee or health care provider who is requesting utilization review or an appeal; or

(2) physician, doctor, or other health care provider who issued the initial adverse determination.

(c) Information a URA must send to TDI. A URA must send to TDI the name, type, Texas license number, and qualifications of the personnel either employed or under contract to perform utilization review with an original or renewal application.

(d) Written procedures and maintenance of records. A URA must develop and implement written procedures, and maintain documentation, to demonstrate that all physicians, doctors, and other health care providers used by the URA are licensed, qualified, and appropriately trained or experienced.

(e) Physician direction requirement. Utilization review conducted by a URA must be under the direction of a physician currently licensed without restriction to practice medicine in Texas, consistent with Insurance Code §4201.152, concerning Utilization Review Under Direction of Physician. The physician must be employed by or under contract with the URA.

§19.2009. Notice of Determinations Made in Utilization Review.

(a) Notice requirements of favorable or adverse determinations.

(1) A URA must send written notification of a determination made in utilization review to the individuals specified in and within the timeframes required for utilization review.

(2) For prospective and concurrent review, the timeframes are specified by:

(A) Section 134.600 of this title (relating to Preauthorization, Concurrent Review, and Voluntary Certification of Health Care) for workers' compensation non-network coverage; and

(B) Insurance Code §1305.353, concerning Notice of Certain Utilization Review Determinations; Preauthorization Requirements; and §10.102 of this title (relating to Notice of Certain Utilization Review Determinations; Preauthorization and Retrospective Review Requirements) for workers' compensation network coverage.

(3) For retrospective review, the timeframes are specified by:

(A) Sections 133.240 and 133.250 of this title (relating to Medical Payment and Denials, and Reconsideration for Payment of Medical Bills, respectively) for workers' compensation non-network coverage;

(B) Sections 133.240, 133.250, and 10.102 of this title, for workers' compensation network coverage.

(4) For workers' compensation non-network coverage and network coverage, a URA must ensure that preauthorization numbers assigned by the URA comply with the data and format requirements contained in the standards adopted by the U.S. Department of Health and Human Services in 45 CFR [Code of Federal Regulations] §162.1102 (relating to Standards for Health Care Claims or Equivalent Encounter Information Transaction) based on the type of service in the preauthorization request.

(b) Required notice elements. In all instances of a prospective, concurrent, or retrospective utilization review adverse determination, written notification of the adverse determination by the URA must include:

(1) the principal reasons for the adverse determination;

(2) the clinical basis for the adverse determination;

(3) a description of the procedure for filing a complaint with TDI;

(4) the professional specialty and Texas license number of the physician, doctor, or other health care provider that made the adverse determination;

(5) a description of the procedure for the URA's complaint system as required by §19.2005 of this title (relating to General Standards of Utilization Review);

(6) a description of the URA's appeal process, as required by §19.2011 of this title (relating to Written Procedures for Appeal of Adverse Determination) and a statement that in a circumstance involving an injured employee's life-threatening condition, the injured employee is entitled to an immediate review of the adverse determination by an IRO and is not required to comply with procedures for an internal review of the adverse determination by the URA for prospective and concurrent utilization review;

(7) for workers' compensation network coverage, a description of and [or] the source of the screening criteria and review procedures used in making the determination, including a description of treatment guidelines used, as applicable;

(8) for workers' compensation non-network coverage, a description of and the source of the treatment guidelines and review procedures used under Chapter 137 of this title (relating to Disability Management) or Labor Code §504.054(b), concerning Contested Case Hearing on and Judicial Review of Independent Review, in making a determination; and

(9) notice of the independent review process. The notice of the independent review process required under this paragraph must include:

(A) a statement that:

(i) the request for a review by an IRO form must be completed by the injured employee, the injured employee's representative, or the injured employee's provider of record and be returned to the insurance carrier or URA that made the adverse determination to begin the independent review process;

(ii) a request for independent review of an adverse determination made under workers' compensation non-network coverage must be timely filed by the requestor consistent with §133.308 of this title (relating to MDR of Medical Necessity Disputes); and

(iii) a request for independent review of an adverse determination made under workers' compensation network coverage must be timely filed by the requestor consistent with §10.104 of this title (relating to Independent Review of Adverse Determination); and

(B) either of the following:

(i) a copy of the request for a review by an IRO form, available at www.tdi.texas.gov/forms; or

(ii) notice in at least 12 point font that the injured employee can obtain a copy of the request for a review by an IRO form by:

(I) accessing TDI's website at www.tdi.texas.gov/forms; or

(II) calling {insert URA's telephone number} to request a copy of the form, at which time the URA will send a copy of the request for a review by an IRO form to the injured employee.

(c) Peer review reports. The notice of determination made in utilization review required under this section and the peer review report required by §180.28 of this title (relating to Peer Review Requirements, Reporting, and Sanctions) may be combined into one document if all the requirements of both sections are met.

§ 19.2010. Requirements Prior to Issuing Adverse Determination.

(a) In any instance in which a URA is questioning the medical necessity or appropriateness of the health care services, before issuing [prior to issuance of] an adverse determination, the URA must afford the provider of record a reasonable opportunity to discuss the plan of treatment for the injured employee with a physician, dentist, or chiropractor. If the health care services in question are dental services, then a dentist may conduct the discussion if the services in question are within the scope of the dentist's license to practice dentistry. If the health care services in question are chiropractic services, then a chiropractor may conduct the discussion if the services in question are within the scope of the chiropractor's license to practice chiropractic. The discussion must include, at a minimum, the clinical basis for the URA's decision and a description of documentation or evidence, if any, that can be submitted by the provider of record that, on appeal, might lead to a different utilization review decision.

(1) The URA must provide the URA's telephone number so the provider of record may contact the URA to discuss the pending adverse determination.

(2) The URA must maintain, and submit to TDI or TDI-DWC on request, documentation that details the discussion opportunity provided to the provider of record, including the date and time the URA offered the opportunity to discuss the adverse determination, the date and time that the discussion, if any, took place, and the discussion outcome.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 1, 2026.

TRD-202601872

Jessica Barta

General Counsel

Texas Department of Insurance

Earliest possible date of adoption: June 14, 2026

For further information, please call: (512) 676-6555